WILMINGTON, NC (WWAY) — The Wall Street Journal reported that Wilmington-based Pharmaceutical Product Development Inc. is exploring a potential sale, according to people familiar with the matter.
“We do not comment on rumors and speculation,” PPD spokeman Ned Glascock said this morning.
But this afternoon, PPD founder and executive chairman Fred Eshelman decided to break that policy. According to a statement, following recent stock market developments, PPD’s board of directors has asked management to review PPD’s strategic plan and capital structure with a focus on unlocking value for shareholders.
“While the company generally has a policy of not commenting on speculation, we want to assure our customers and employees that the company remains focused on executing its long-term business strategy,” Eshelman said in a statement. “We are absolutely dedicated to performing for our customers and committed to executing the important research programs that they have entrusted to us.
“We are looking at our long-term plan and our capital structure to see if there are any actions, which might create value at this time. We are not engaged in any discussions around a combination with other clinical research providers. We remain laser-focused on executing our business and serving our customers with the quality and service they expect and deserve.”
PPD is a provider of outsourced clinical research services to drug companies.
UNCW Senior Economist Dr. Woody Hall says if the company is sold to a similar company there’s a great chance that a better product can be made at a lower cost. The downside is downsizing.
“I think the new firm, if created, will look for ways to cut cost if cost can be cut, and that’s one way to do it: to lay off employees,” Hall said.
Others say if the sale of PPD does happen, it’s important that the community makes contact with the buyer.
“We’re going to need to make sure we’re engaged with the buyer if that happens; make sure we know what their strategy short and long-term is,” John Hinnant of Wilmington Downtown Inc. said. “Obviously we like having PPD here. They’re a great corporate citizen.”
According to tax records PPD has had a significant impact in the Cape Fear paying more than $150,000 in county and city taxes in 2010. In 2009 the company paid more than $160,000 in local taxes.
With a market capitalization of about $3.2 billion could fetch bids from both private-equity and larger clinical-research providers, the Wall Street Journal said citing its sources. The sources also cautioned that PPD could still change its plans.