PPD Competitive Analysis

Competitive Analysis of PPDI

• Company Profiled: Pharmaceutical Product Development, Inc. (PPDI)

• By Thomas C. Lawrence

Company Profile: PPDI

• Pharmaceutical Product Development, Inc.

• Top 10 Clinical Research Organizations (CROs) - pharmaceutical services companies that are outsourced by large pharmaceutical and biotechs to run clinical trials and related services in order to get drug candidates FDA approval process.

Business Summary

• PPDI provides a range of R&D and consulting services in the development and discovery sciences.

• Development segment: provides pre-clinical and Phase I to IV clinical development.

• Discovery Sciences services include pre-clinical analysis of anti-cancer therapies, pre-clinical biological services, & compound partnering arrangements w/ drug development &

commercialization.

Company Overview

• Established in 1990 • 6,600 employees

worldwide• 13 offices in the

USA/CAN • Operates in 38

locations in 27 countries worldwide

• Services 41 of the Top 50 Pharma

• Listed on NASDAQ as PPDI

• 7 independent Board of Directors w/CEO as Vice-Chairman

2004 Revenue Split

76%

17%

5%2%

Phase II-IVLabsPhase IDiscovery

Strategic-bit Group Mapping

Competitor Map

Indirect Competitors

Direct Competitors

PPD’s CoreMarkets

PPD

Phase I (1)

Phase II/III/ IIIb/IV (1)

Quintiles Parexel CovanceICON Omnicare Kendle PRA

Other CROs: MDS Pharma PharmaNET AaiPharma Inveresk i3 Research

SMOs: Radiant Research AmericasDoctor, Inc. SMO-USA, Inc. nTouch Research

Central Labs (1)

Covance Quintiles Charles River Labs MDS Pharma

Large Reference Labs: Quest LabCorp AmeriPath

AMCs: BRANY Harvard

Duke

Johns Hopkins Pittsburgh Clin Rsch

Network Columbia-Cornell-NY Presbyterian

PPD Discovery (2)

Quintiles

Pharmaceuticals: Pfizer GSK Sanofi-Aventis Others

Biotechs: Amgen Genentech Others

Early Stage CROs:Covance Inveresk AaiPharma MDS Pharma SFBC Intl Charles River Labs

Full ServiceCROs:Quintiles ICON Omnicare Kendle

Note: PPD is not subject to

product life cycle. PPD provides services, which are not set in a particular order. For example, Phase I trial could lead to winning a Phase II, but not necessarily. CROs usually have to bid on each piece of clinical development. Central Labs could be bundled with Phase I – IV or be entirely separate business wins. Therefore, there is not clear direction like with a company that produces

products. PPD Discovery does not interact with other business units.

Quantitative SWOT Analysis of PPD

STRENGTHS Weight Rank(-5 to 5)

Total WEAKNESSES Weight Rank(-5 to 5)

Total

Dedicated Team ModelPPD has a dedicated team model in place, which allows its clinical trial monitors to be dedicated to particular accounts, instead the regional trial monitor model used by other CROs like Covance. This gives PPD monitors the ability to be more familiar with particular clients and service them better. PPD can leverage its staff more efficiently. (1)(2)(4)(7)

0.3 4 1.2 Investing in Proprietary Compounds – Negative Side - InternalInvesting in compounds is very expensive. CROs do not generally have the “deep pockets” of Pharma. PPD is drug development expenses can hurt it in the short term because this is money that they can not spend in other areas (7).

0.3 -2 -0.6

Management, Operating Efficiencies, and StructureProfit leaders with excellent growth and little debt. It has high operating efficiencies in place and has high operating margins. It can charge premium prices to clients. It is less vulnerable to M&A activities than its peers because of its balanced client-mix. PPD would be able to initiate and survive a “price war”. PPD has a strong IT infrastructure, which strengthens its efficiency. (2) (3)

0.4 5 2.0 High Employee Turnover/Talent & Service DilutionPPD has a cancellation rate for its contracts compared to peers. PPD has high growth rate (35%), if you add in the normal attrition rate for CROs, then it equals a dilution of talent. It becomes difficult to maintain quality and service, if you are growing quickly and half the people in your firm are new. (7)

0.3 -1 -0.3

Investing in Proprietary Compounds – Positive SidePPD, unlike, other CROs is investing in proprietary compounds. These compounds are potential blockbusters, which could be very lucrative for the company. It may even spin-off the pharma business. (2)(3) (7)

0.2 3 0.6 Lack of Diversification in CRO businessPPD is not as diversified as some other CROs like Covance. It gets 75% of its business from Late Stage, which makes it vulnerable to deceleration of the Phases II –IV markets. PPD wins 71% of its business from North America and only 29% from ROW. (1)(4)

0.3 -2 -0.6

Medical Device Unit & Phase IV CompetencyPPD has a dedicated medical device unit, so it is able to target medical device companies’ business than its peers, which often overlook this segment or do not have the core competencies to make an attractive bid. PPD has significant Phase IV experience in wide variety of TAs, but few were completed in last 5 years. However, most are from large global studies. (7)

0.1 1 0.1 Weakness in concentration areas of Clinical ExpertisePPD has core competencies in CNS, Oncology, and Infectious Disease. However, only Oncology and ID are on the list of top six major therapeutic categories.(1)(4)

0.1 -1 -0.1

TOTAL 1 3.9 TOTAL 1 -1.6

OPPORTUNITIES Weight Rank(05 to

5)

Total THREATS Weight Rank(05 to 5)

Total

NIH BidsPPD has more experience than its peers with bids on lucrative NIH contracts. Covance, for example, has a long way to go to catch up with PPD in the government bids market. It only needs to win one bid in order to make a windfall. Government contracts currently make up about 11% of revenue. Thus, diversifying its revenue streams. (5) (7)

0.8 5 4.0 Industry EvolutionDecelerating phase II-IV business, patent expiration for Big Pharma, weak pipelines and TA specialization, pharma industry transition into genomics. PPD has done little to invest intro infrastructure, personnel, and technology for an industry in evolution. (6)

0.6 -5 -3.0

Phase IV /Safety Market OpportunitiesPPD should take advantage of the growing Phase IV market, particularly because of the growing safety concerns. This would also encompass safety surveillance and registry studies. In addition, several Phase III studies are being design with rigor for safety reasons. Furthermore, it is not uncommon for Phase IIIb studies to be given Phase III rigor. (6)

0.2 4 0.8 Investing in Proprietary Compounds – Negative Side - ExternalInvesting proprietary compounds could be seen as potential conflict of interest. Therefore, clients that have compounds with similar properties or in the same therapeutic class/indication may not take their business to PPD. In its co-development of agreements, PPD normally buys preferred stock in its partners, which exposes it to financial volatility inherent in Biotechs. (7)

0.3 -2 -0.6

Medical Device Market Medical device firms have tighter profit margins than pharmaceutical companies. Therefore, they may find it less beneficial to outsource clinical trials. As a result, PPD’s dedicated medical device unit and entry into this market may not necessarily pay-off. (7)

0.1 -1 -0.1


Strengths to Weaknesses: 2.3Opportunities to Threats: 1.1

Total SWOT: 3.4, or the overall situation is positive

Strengths to Weaknesses: 2.3Opportunities to Threats: 1.1

Total SWOT: 3.4, or the overall situation is positive

Quantitative SWOT Analysis of Covance

STRENGTHS Weight Rank (-5 to 5)

Total WEAKNESSES Weight Rank (-5 to 5)

Total

Diversified Revenue StreamsCovance is able to leverage its scalable central labs business. CVD is also more evenly split between early stage and late stage business unit. (1)

0.3 5 1.5 Overpriced BidsCovance CRO units need to revamp their Bid Grids. CVD has an ongoing problem with over priced bidding. CVD is consistently ranked as the most expensive CRO among its peers. (7)

0.6 -5 -3.0

Restructuring creates synergiesIt can get future late stage business from early stage business wins. Cross-selling initiatives have been implemented since its restructuring into early stage, late stage, and central lab business groups. Synergies in related business units can now be tapped into i.e. Late Stage has Phase II-II, Periapproval, and IVRS business units that complement each other. (2)

0.2 4 0.8 High Employee TurnoverCovance generally pays its employees less than its competitors. For example, Omnicare and PPD both have offices close to Radnor, PA and both pay more. CVD employees are aware of this. In addition, employees view CVD as a stepping stone to get experience to go and work for Big Pharma with deep pockets. (8).

0.3 -3 -0.9

Targeted Selling InitiativesCovance has broken away from its previous cold calling and used cars salesman techniques. Marketing teams have been created to support sales and identify new opportunities. CVD’s first annual global sales meeting led to sales staff being trained on the “blue sheet process”. Annual sales action plans have revamped. Services are being bundled and there is more cross-selling. (3)

0.3 3 0.9 Concentrates too much on low-margin CRO businessCovance concentrates on its key business, but is not diversifying into high margin businesses like drug development like PPD and Quintiles. Quintiles also diversifies by having consulting services. (9)

0.1 -5 -0.5

Strong in key therapeutic areas.CVD has strong expertise in infectious disease, oncology, and cardiology. It is also the leader in cardiac safety. These are 3 of the top 6 TAs.(4)

0.2 2 0.4


OPPORTUNITIES Weight Rank(-5 to 5)

Total THREATS Weight Rank(05 to 5)

Total

NIH BidsCovance has recently attempted to bids on lucrative NIH bids. Covance has hired an expert in NIH bids as a consultant. It has also dedicated a VP to spearhead this initiative. Covance has a long way to go to catch up with PPD in the government bids, but it only needs to win one bid in order to make a windfall. (5)

0.9 5 4.5 Industry EvolutionDecelerating phase II-IV business, patent expiration for Big Pharma, weak pipelines and TA specialization, pharma industry transition into genomics. Covance has done little to invest intro infrastructure, personnel, and technology for an industry in evolution. (10)

0.7 -5 -3.5

Targeting BiotechsCovance has begun targeting biotech clients with drug candidates that CVD has specific therapeutic expertise. (6)

0.1 2 0.2 Increased competition and price warsCovance is in an overall good position. However, it is vulnerable and would have a hard time surviving a price war among CROs. (11)

0.3 -2 -0.6

.


Strengths to Weaknesses: -0.8Opportunities to Threats: -0.6

Total SWOT: -1.4, or the overall situation is negative

Strengths to Weaknesses: -0.8Opportunities to Threats: -0.6

Total SWOT: -1.4, or the overall situation is negative

Demographic/Economic Factors: •Targeting specific indications and racial categories (5)•India & China outsourcing (2)•Treatment of naïve patient populations: Eastern EU, Asia, & Latin America (9)

Technological / Physical Environment:•New discovery technologies and knowledge basis i.e. genomics, proteonomics, metabonomics (10)•Transition from mass produced chemical based therapies to genomics based therapies (10)•Restructuring of Big Pharma from production i.e. blockbuster model to drug design i.e. IBM Model (10)

Political/Legal Environment:•Development of worldwide GCP standards (3)•EU Directive – compliance (3)•Ongoing changes at FDA (10)•FDA reactions to drug development scandals (3)•Possible future healthcare reform due to expensive drug prescriptions (10)

Social / Cultural Environment:•Big Pharma and clinical trials industry negative reputation on par with tobacco industry (3)•Recent health concerns about blockbuster drugs and recalls & lack of consumer confidence due to scandals i.e. Merck (9)•Too many “me too” drugs in the development pipeline (3)•Large global clinical trials (6)

Kotler’s Macro-Environment Model applied to the CRO Industry

Economic Characteristics of the Industry

• Product Characteristics: no major distinction from the Top 10 CROs

• Scale Economies: High = Low Cost • Learning & Experience Effect: major factor • Degree of Vertical Integration: was relatively low,

but is now progressively moving to medium level• Ease of Entry/Exit: High/High• Technology/Innovation: Medium to High

Porter’s 5 Forces applied to CRO Industry

Threat of Substitute products

CROs controlled 22% of contract research with Academic Medical Centers (AMCs) controlling 30% in 2002. Meanwhile, Site Management Organizations (SMOs) controlled only 2% of the market and other types of organizations controlling only 1% of the market. AMCs and SMOs are viable substitutes for CROs. Therefore, AMC have gained significant market share in 2002. CROs are projected to control 81% of the contract research market. However, AMCs market share is projected to decline to 16% with SMOs and

others’ market share remaining steady. One major reason the lion’s share of the contract research is being taken away from AMC is because AMC get their funding in the form of grants. CROs, in contra , offer a fixed fee arranged in the planning stage, payable upon completion, with a starting-up fee usually paid before the outset. Thus, outsourcing the clinical trail project to a CRO tends to cost a sponsor less. Another reason that AMCs are projected to lose market share to CROs is because of delays in clinical trials. Big Pharma needs to get drugs to market as fast as possible in order to make even greater profit, so any delays in clinical trials costs a sponsor potentially millions of dollars. The majority of SMOs are based in the USA and are regional, therefore, they are not going to

be used for large global studies.(1)

Threat of Substitute products

CROs controlled 22% of contract research with Academic Medical Centers (AMCs) controlling 30% in 2002. Meanwhile, Site Management Organizations (SMOs) controlled only 2% of the market and other types of organizations controlling only 1% of the market. AMCs and SMOs are viable substitutes for CROs. Therefore, AMC have gained significant market share in 2002. CROs are projected to control 81% of the contract research market. However, AMCs market share is projected to decline to 16% with SMOs and

others’ market share remaining steady. One major reason the lion’s share of the contract research is being taken away from AMC is because AMC get their funding in the form of grants. CROs, in contra , offer a fixed fee arranged in the planning stage, payable upon completion, with a starting-up fee usually paid before the outset. Thus, outsourcing the clinical trail project to a CRO tends to cost a sponsor less. Another reason that AMCs are projected to lose market share to CROs is because of delays in clinical trials. Big Pharma needs to get drugs to market as fast as possible in order to make even greater profit, so any delays in clinical trials costs a sponsor potentially millions of dollars. The majority of SMOs are based in the USA and are regional, therefore, they are not going to

be used for large global studies.(1)

Rivalry Among Existing Industry Firms

The CRO market is overall very fragment with no one firm holding more than 12% of market share. However, the Top 10 CROs do control 50% of the market. The top players

are Quintiles, Covance, PPD, Parexel, Omnicare, Kendle, and ICON. These players distinguish themselves to Big Pharma clients with their respective expertise in particular

therapeutic area. For example, Omnicare is strong in geriatric trials, while Kendle is strong in Asthma studies. The big players are commonly outsourced because of their ability to

perform large multi-national trials and trials in foreign countries. (1)

Rivalry Among Existing Industry Firms

The CRO market is overall very fragment with no one firm holding more than 12% of market share. However, the Top 10 CROs do control 50% of the market. The top players

are Quintiles, Covance, PPD, Parexel, Omnicare, Kendle, and ICON. These players distinguish themselves to Big Pharma clients with their respective expertise in particular

therapeutic area. For example, Omnicare is strong in geriatric trials, while Kendle is strong in Asthma studies. The big players are commonly outsourced because of their ability to

perform large multi-national trials and trials in foreign countries. (1)

Bargaining Power of Buyers

GSK, Pfizer, Wyeth, Takeda, and P&G are cutting down the number of vendors and are in the process of using preferred providers list. GSK, for example, is going from using 116 vendors to only 6 outsourced CROs.

Meanwhile, Pfizer, Roche, and Schering Plough have indicated that they will increase the use of CROs. Conversely, Astra Zenecca and Novartis

will rely less on CROs and do more in-house studies. Abbott has indicated that it will eliminate candidates earlier in the pipeline, which will mean less outsourced studies. In addition, mergers and acquisitions in the industry i.e. Pfizer-Pharmacia, Sanofi-Aventis, Biogen-Idec, Amgen-Immunex, and Merck-Atun will impact outsourcing. Generally speaking the M&As will slow down outsourcing as the these companies focus on

integration. Big Pharma and CROs have historically had a master-servant relationship with CROs entering into low margin contracts.

However, the introduction of preferred provider agreements should be greatly beneficial to CROs. (2)

Bargaining Power of Buyers

GSK, Pfizer, Wyeth, Takeda, and P&G are cutting down the number of vendors and are in the process of using preferred providers list. GSK, for example, is going from using 116 vendors to only 6 outsourced CROs.

Meanwhile, Pfizer, Roche, and Schering Plough have indicated that they will increase the use of CROs. Conversely, Astra Zenecca and Novartis

will rely less on CROs and do more in-house studies. Abbott has indicated that it will eliminate candidates earlier in the pipeline, which will mean less outsourced studies. In addition, mergers and acquisitions in the industry i.e. Pfizer-Pharmacia, Sanofi-Aventis, Biogen-Idec, Amgen-Immunex, and Merck-Atun will impact outsourcing. Generally speaking the M&As will slow down outsourcing as the these companies focus on

integration. Big Pharma and CROs have historically had a master-servant relationship with CROs entering into low margin contracts.

However, the introduction of preferred provider agreements should be greatly beneficial to CROs. (2)

Bargaining Power of Suppliers

Clinical Investigator Networks, Site Management Organizations, and Clinics are outsourced by CROs for quick ramp up for new wins. Generally speaking,

these “supplier” negotiate with the CROs, but are subject to competitive bidding by the size of the bids

won by CROs. These organizations are generally within a CROs network and will usually not turn down

work. (1)

Bargaining Power of Suppliers

Clinical Investigator Networks, Site Management Organizations, and Clinics are outsourced by CROs for quick ramp up for new wins. Generally speaking,

these “supplier” negotiate with the CROs, but are subject to competitive bidding by the size of the bids

won by CROs. These organizations are generally within a CROs network and will usually not turn down

work. (1)

Threat of New Entrants

There is always the possibility of new entrants, but due to high entry barriers it would be extremely difficulty for new entrants. However, in special situations like Jasper, a new CRO, created by former Pfizer-Pharmacia employees could be an actual threat and in this case Jasper could siphon of Pfizer business.

On the other hand, a more feasible scenario involves mergers between smaller (Mom & Pop) CROs to form a large CRO capable of challenging the Top 10. These small CROs are not direct competitors to the Big CROs because they have tendency to very specialized players that focus on particular therapeutic area or service. (3)

Threat of New Entrants

There is always the possibility of new entrants, but due to high entry barriers it would be extremely difficulty for new entrants. However, in special situations like Jasper, a new CRO, created by former Pfizer-Pharmacia employees could be an actual threat and in this case Jasper could siphon of Pfizer business.

On the other hand, a more feasible scenario involves mergers between smaller (Mom & Pop) CROs to form a large CRO capable of challenging the Top 10. These small CROs are not direct competitors to the Big CROs because they have tendency to very specialized players that focus on particular therapeutic area or service. (3)

LL

HH

L/ML/M

LL

5 Forces Analysis: RivalryTop CROs % of Market Share

12%

11%

7%

6%

5%3%2%2%2%1%

49%

QuintilesCovancePPDIMDS PharmaParexelInvereskOmnicareKendleICON Aai PharmaOther

5 Forces Analysis: SubstitutesContract Research Market Share by Organization

Type for 2002

67%1%

30%

2% CROsOthersAMCsSMOs

5 Forces Analysis: SubstitutesContract Research Market Share by Organization

Type projected to 2008

81%

1%

16% 2%

CROsOthersAMCsSMOs

BCG Growth Share Matrix applied to PPD Business Units

Phase II-IVPhase II-IV

High9

Mid

1

Low0.2

Low0%

High50%

Market Growth

Rate

Phase One

Phase One

Central Labs

Central Labs

Mid25%

PPD

Discovery

Relative Market Share

Competitive Landscaping: Penetration Landscape

Vulnerable

High

Low

Terrorist or Pond Life

High

Aggressors / Transients

Defenders

Market

Share

Company Size

CVD

PPDI

PRXLICONKNDL

Competitive Landscaping: Performance Landscape

Shake Up /Potential Disposer

High

Low

Start Up Disposer

High

Penetrator

Vigorous Defenders

Market

Share

Profitability

KNDL ICON

PRXLPPDI

CVD

Competitive Landscaping: Dependency Landscape

Fighter

High

Low

Insignificant

Large

Incubator

Defender

Share of Revenue

Company Size

PPDI

CVD

PRXL

ICON

KNDL

Competitive Landscaping: Commitment Landscape

Content

Long

Short/ Small

Innovator

Large

Aggressor

Traditional

Time in

Business

Company Size

CVDICON

PPDI

PRXL

KNDL

Competitive Landscaping: Innovation Landscape

Investors

Long

Short/ Small

Wannabees

Large

Coasters

Towers of Strength

R&D

Spend

Profitability

PPDI

CVDICONPRXLICON

Backlog & Client Mix

• Backlog end ‘o4 $1.292 million. Pharma 59% , Biotech 28%, & Gvmt/Other 13%.

• Pharma 63.1% & Biotech 26.9% of 4Q revenue w/ Gvmt/Other 10.1%.

• PPDI’s 2004 client mix: largest client 6.2% of revenue, Top 5 24.6%, Top 10 39.3%, and Top 25 64.4%.

Competitor Analysis #1: Benchmarking PPD vs. Key Competitors

Company Mkt Cap ($M)

Sales ($M)

Growth Profit-ability

Financial Health

Industry Avg

$1,008 $416 B- B B

PPDI $2,380 $804 B A- A-

CVD $2,667 $1,023 C A- A+

PRXL $628 $664 C B B

ICLR $501 $297 ---- ---- ----

KNDL $134 $212 D C B

Sources:

Van Der Ghinst, Jerome. “PPD Issues 2005 Forecast.” & “Morningstar Industry Peers Stock Grades.” Morningstar Feb 14, 2005.


R&D Employee Productivity Comparison

2000 2001 2002

Covance

Per Employee in Period (000’s) $105.6 $111.3 $128.7

Seq % growth NA 5.3% 15.6%

PPD


Seq % growth 5.1% 10.4% 5.8%

Quintiles


Seq % growth NA 20% 17%

Parexel


Seq % growth -2% 3% 10%

Icon


Seq % growth 6% 9% 0%

Total Average $91.1 $99.8 $109.8

Pharma R&D Expense per Employee

$275.0

Cost Differential -$165.2


Industry = Medical Laboratories & Research 1 = As of 2005

Figures as of Nov 7, 2006

PPDI CVD PRXL Quintiles (Pvt) Industry

Market Cap: 3.83B 3.89B844.43

MN/A 105.15M

Employ ees: 8,000 6,600 5,600 16,0001 264

Qtrly Rev Growth (yoy):

14.60%

16.00%

20.00%

N/A 12.90%

Revenue (ttm): 1.20B 1.39B793.89

M2.40B1 39.83M

Gross Margin (ttm):

47.20%

32.03%

27.80%

N/A 47.20%

EBITDA (ttm):273.84

M245.57

M76.50

MN/A 804.30K

Oper Margins (ttm):

19.08%

13.68%

5.79% N/A 5.84%

Net Income (ttm):157.12

M136.66

M27.20

M600.00K1 -811.10K

Areas of Clinical Expertise

Clinical Trials by Major Therapeutic Categories in the CRO Industry• Oncology• Neurology• Anti-Infectious• Cardiovascular• Immunology• Respiratory

Inveresk PPDI Covance Parexel IconInfectious Disease (HIV) Oncology Oncology Caridiovascular CaridiovascularRespiratory CNS Cardiology Oncology OncologyOncology Infectious Disease Infectious Disease Neurology Neurology

Competitive Sales Analysis

841

1,060

547

0

200

400

600

800

1000

1200

PPDI Covance Parexel

Profitability Comparison

Company YearGross Profit Margin

EBITDA Margin

Earns bef. Extra

PPDI 2004 46.60% NA 11.80%PPDI 2003 51.50% 15.50% 6.90%Covance 2004 32.40% 17.70% 9.30%Parexel 2004 34.90% 11.20% 2.50%

R&D Employee Productivity Comparison

2000 2001 2002CovancePer employee in period (000's) $105.60 $111.30 $128.70Seq % growth NA 5.30% 15.60%PPDIPer employee in period (000's) $90.90 $100.30 $106.20Seq % growth 5.10% 10.40% 5.80%QuintilesPer employee in period (000's) $91.10 $109.40 $128.10Seq % growth NA 20% 17%ParexelPer employee in period (000's) $83.90 $86.50 $95.20Seq % growth -2% 3% 10%IconPer employee in period (000's) $84.10 $91.40 $91.00Seq % growth 6% 9% 0%InvereskPer employee in period (000's) NA NA $87.10Seq % growth NA NA NATotal Average $93.40 $105.50 $118.10Pharma R&D expense per employee $275.00Cost Differential ($156.90)

Book-to-Bill Ratio

Market-Attractiveness / Competitive Position-Matrix applied to PPD and its market

High (8-10)

Mod (4-7)

High (8-10)Mod (4-7)

Low (0-3)

Low (0-3)

Company’s Competitive Position

Market

Attractiveness

PPD

Note: See 8b spreadsheet for data and sources.

(7.8)

(9.7)

Industry-Attractiveness / Business Position-Matrix applied to PPD and its industry

1 1 21 2 32 3 3

High

Med

High Med

Low

Low

Business’s Competitive Position

Industry Attractiveness

PPD

0

5

5 0

(3.80)

(0.50)

Key Success Factors

• Efficient staff deployment, training, recruiting & retention

• Anticipates customer needs• Strong management team & good financial

mgmt• Strong project mgmt & tight integration

between sales & ops• Rapid deployment of technological advances

Conclusions/Early Warnings

• Count on PPD leveraging relationships to win PPAs in a competitive CRO market

• Anticipate Dapoxetine’s success and spinning-off discovery business unit

• Expect PPD continue expansion into EU, Latin America, & Asia

• Shift towards higher-margin business• Will be #1 or #2 position in Ph I-IV.

Conclusions/Early Warnings

• BD efforts to win government contracts• Target medical device, PMS, & Phase I markets• Bundling of GP or bioanalytical svcs w/LSDS• Expect PPD to use cash flow to invest in core

business• Look for PPD to target biotech clients chasing

specific indications – overseas infrastructure

PPD Competitive Analysis

Documents

Transcript of PPD Competitive Analysis