PPD reports surge in profit, sales

PPD, one of the Triangle's largest drug-research companies, reported that its quarterly profit more than doubled, bolstered by stronger sales to pharmaceutical customers.

The Wilmington-based business, which employs about 1,400 people in the Triangle, helps drug companies conduct clinical trials on experimental drugs and provides other services. Many pharmaceutical and biotechnology companies are using PPD and other so-called contract research organizations to keep their own costs down.

PPD's net income surged to $45.4 million during the latest quarter ended June 30. Revenue rose to $407.7 million, up 10 percent from the same quarter last year.

The strong results followed rumors earlier this month that PPD officials were considering a sale. Founder and executive chairman Fred Eshelman said at the time that PPD doesn't comment on speculation, but that management is reviewing its "long-term plan and our capital structure to see if there are any actions" that would increase shareholder value.

PPD has hired a financial advisor to help with the review, "including advising us on potential ways to unlock value for shareholders," Eshelman said on a conference call with Wall Street analysts today. The review "does not envision a combination with another CRO," he said, but declined further comment.

Analysts have speculated that the company could attract interest from private-equity investment firms, which have acquired several other CROs recently.

The rumors sparked a rally in PPD shares earlier this month, but the stock has retreated slightly since then.

PPD shares rose 28 cents to $30.04 this afternoon. The stock is up 10 percent this year.

The company also is continuing its search for a new CEO. David Grange retired in May after only two years on the job.

PPD has identified good candidates, Eshelman said on the analyst call. "As I've noted previously, we are focused on finding the right candidate and less so on the speed of the process," he added.