WILMINGTON, N.C. (AP) — Drug development contractor Pharmaceutical Product Development Inc. said late Monday that its profit shrank 60 percent in the fourth quarter on canceled contracts and other impairments.
Three large project cancellations alone represented 4 percent of the company's year-end backlog. In the final quarter, cancellation costs and other adjustments added up to about $285 million.
"Although fourth quarter cancellations and adjustments were higher than anticipated, we delivered strong operating cash flow during the quarter," said CEO David Grange.
PPD said its profit fell to $19 million, or 16 cents per share, from $47.2 million, or 40 cents per share in the fourth quarter of 2008. The company said development revenue slid 3 percent, to $328.1 million from $338.7 million. The results included $10 million in impairment charges related to PPD's dermatology program and its investment portfolio.
PPD said it received $465.6 million in new business authorizations in the fourth quarter, and had a backlog of $3 billion at the end of the quarter.
Along with its development revenue, PPD gets money from reimbursement for its services. It reported $28.8 million in reimbursement revenue in the fourth quarter, up from $24.3 million a year ago. Including reimbursements and other revenue, its total revenue fell 2 percent, to $357.4 million from $363.1 million.
For the full year, PPD said its profit fell 15 percent, to $159.3 million, or $1.18 per share, from $187.5 million, or $1.56 per share. Revenue slid 9 percent, to $1.42 billion from $1.55 billion.