* Shares sink 18 pct to $17.97
* Cuts 2009 outlook (Adds analyst comment, updates share movement)
April 22 (Reuters) - Shares of Pharmaceutical Product Development Inc (PPD) PPDI.O fell as much as 18 percent to a four-year low Wednesday, a day after the clinical-research service provider lowered its full-year forecast.
Chief Executive Officer Fred Eshelman said PPD experienced unprecedented cancellation levels, significant rescheduling of existing backlog in the first quarter, echoing what smaller rival Kendle International Inc KNDL.O said on Monday. [ID:nBNG483585]
“While PPD operates a much larger organization with a far larger and more diversified backlog than that of Kendle, the company is not invincible to the noise created by weak biotech funding, compound program reshuffling at pharma, and pharma M&A,” Wachovia analyst Greg Bolan wrote in a note to clients.
PPD reported a disappointing first-quarter, but not totally surprising given the difficult operating environment, he said.
PPD and Kendle’s announcement pulled down the stocks of most of the clinical research organizations (CROs) including, Icon Plc (ICLR.O), Parexel International Corp PRXL.O and Covance Inc CVD.N, which are scheduled to report quarterly results next week.
William Blair & Co analyst John Kreger said, “We are now more concerned about the first-quarter CRO reporting season following PPD and Kendle’s sobering industry comments, which suggest no growth in 2009.”
For 2009, PPD forecast earnings of $1.54 to $1.60 a share, on revenue of $1.40 billion to $1.47 billion.
Its prior forecast for the year was earnings of $1.97 to $2.05 a share, on revenue of $1.60 billion to $1.67 billion. [ID:nWEN7536]
Shares of PPD were down $3.63 at $18.36 in late morning trade. They earlier touched a low of $17.97. The stock was one of the biggest loser on Nasdaq.
Icon shares were down 16 percent at $13.55 Wednesday on Nasdaq, while shares of Parexel were down 9 percent to $8.12. Covance shares were down 6 percent at $34.70 on the New York Stock Exchange. (Reporting by Anand Basu in Bangalore; Editing by Ratul Ray Chaudhuri, Jarshad Kakkrakandy)