Monday, August 1, 2011
It’s a call I made in January. So what took SFBC so long to decide to change its name to PharmaNet? While the move took a little longer than expected, it is another sign that new CEO Jeffrey McMullen and his PharmaNet-ters still have a solid chance to turnaround the troubled former SFBC.
Now just emerging from a year of legal and financial blows and bad publicity, SFBC has decided to change its name to PharmaNet Development Group, pending shareholder approval later this month. The company’s late stage division will continue to be called PharmaNet, and its early stage divisions will operate under the names Anapharm and Taylor Technology.
It should comes as no surprise that SFBC is getting out of Florida after its Miami phase I unit performed so poorly last quarter. Current SFBC officials—the former heads of PharmaNet—needed to stop the bleeding before the whole company was in jeopardy. Its later phase business is still holding its own.
PPD’s two-for-one stock split is good news for the top global clinical research organizations. Investors attracted to the sector by the company’s split announcement Feb. 8 can focus on PPD and other top CROs rather than the sideshow embattled SFBC has become. When new investors look at top CROs such as PPD, Quintiles , PRA, ICON, Parexel and Covance, they will see the pharmaceutical outsourcing industry ready to consolidate around a handful or so of these companies.These global CROs have a big advantage over the estimated 1,000 other small CROs throughout the world. They have international infrastructure in place to conduct complex clinical trials in thousands of patients at sites across multiple countries.That global presence is not easy to build and represents a barrier to entry for small CROs trying to roll up into a global player.
A new CEO and a change of scenery are good first steps to righting the ship at SFBC. A new name could also do the embattled contract research organization some good. Something like, say, PharmaNet? Two weeks ago Jeffrey McMullen assumed the role of CEO. He joined SFBC as part of the company’s December 2004 acquisition of CRO PharmaNet for $245 million in cash. By our measures, the PharmaNet name has a lot of positive brand equity. It has been a top performer in the Thomson CenterWatch Survey of Investigative Sites in the US in 2005 and 2003. It was also top-rated in Europe in 2004. That’s high praise from our survey respondents – principal investigators and study coordinators – who are on the front lines of clinical research.