So much for MDS’ plans to focus its Pharma Services unit on early-stage drug development.
The Toronto-based company, which sold its late-stage contract research business earlier this summer to focus on discovery through phase IIa proof-of-concept services, is now looking to sell off the rest of its contract research organization (CRO), MDS Pharma Services, including its early-stage services and its Global Central Labs division.
“One of the realities of doing business in a global economy is the need to be agile and nimble to respond to changing realities,” said MDS president and CEO Stephen DeFalco on an investor conference call Wednesday. “The challenges faced by MDS as a result of the recent global economic downturn … are unparalleled and have been exceptional. In light of these changes, we believe this new course and repositioning of MDS is in the best interest of the company and its shareholders.”
MDS is also selling MDS Analytical Technologies, a supplier of drug discovery and life sciences research tools, to Danaher Corporation for $650 million in cash. If and when MDS is able to sell Pharma Services, the company will focus solely on its MDS Nordion business, a provider of medical isotopes for molecular and diagnostic imaging, radiotherapeutics and sterilization technologies. If a suitable buyer is not found, MDS said it will retain the early-stage division and invest in building the business.
“It’s a good strong business and a market leader. Having said that, it’s a somewhat choppy deal environment. We do have a couple of interested parties, and we’ll be seeing how that comes together,” DeFalco told investors when asked about the likelihood of MDS selling the Pharma Services business.In 2008, MDS Pharma contributed $482 million to MDS' total net revenues—40% of the company's total revenue.