MDS Pharma Profits Sink in 3rd Quarter
Canadian life science company MDS, the parent company of King of Prussia, Pa.-based CRO MDS Pharma Services, reduced its fiscal 2008 revenue and profit outlook after reporting lower than expected third-quarter results in its contract research division. The company now expects fiscal 2008 revenue to be in the range of $1.23 billion to $1.25 billion, down from its previous forecast of $1.25 billion to $1.29 billion.
Although third quarter revenues for MDS Pharma grew 3%, to $122 million, compared with the same quarter last year, the CRO experienced a $2-million EBITDA loss compared to a $4 million gain in 2007. The decrease reflects slower than expected revenue growth in late-stage business and higher than expected costs, MDS President and CEO Stephen DeFalco told investors in a conference call today. Early stage research revenue grew but late-stage revenue decreased due to cancelled and delayed new projects.
“I’m not happy with where Pharma Services is right now and I think that’s clear,” DeFalco said.
He expressed optimism about the future based on a record $486-million backlog. “Our priority is to translate those new business wins into top and bottom line growth,” DeFalco said.
Earlier this month, MDS Pharma appointed Ross Tonkens, MD, vice president, medical affairs, to provide medical oversight for its phase IIa clinical research activities and to direct the medical and clinical activities of MDS Pharma’s Development & Regulatory Services line of business. In June, MDS cut 210 employees, 75% of whom came from MDS Pharma.