Merck sells vaccine lab to PPD in research deal

NEW YORK (Reuters) - Pharmaceutical Product Development (PPDI.O), a large contract research company, has purchased Merck & Co's (MRK.N) vaccine testing laboratory as part of a collaboration with the drugmaker, PPD said on Monday.

The deal is the latest between the pharmaceutical companies and contract research organizations, as drugmakers seek to cut costs and be more efficient with their huge research budgets.

PPD bought Merck's 130,000 square-foot vaccine testing laboratory and related equipment in Wayne, Pennsylvania, and hired nearly 80 Merck workers who operate the facility. Financial terms of the deal, which closed on Dec 31, were not disclosed.

Under the agreement, PPD will provide Merck various development and testing services to support Merck's vaccine portfolio over five years. In addition, PPD expanded its existing central lab agreement with Merck.

Merck's extensive vaccine portfolio includes the cervical cancer vaccine Gardasil.

The drugmaker and PPD have "worked together during the past several months to develop a novel and robust approach to expand our long-standing and trusted relationship," Tony Ford-Hutchinson, senior vice president for Merck Research Labs, said in a statement.

Wilmington, North Carolina-based PPD said the acquisition significantly expands its overall global central laboratory business by adding vaccine and biologic testing, assay development and sample storage capabilities.

Last year, Eli Lilly (LLY.N) reached a 10-year, $1.6 billion lab services deal with testing company Covance Inc (CVD.N).

(Reporting by Lewis Krauskopf, editing by Dave Zimmerman)