PPDI shares climb on analyst upgrade

AP News
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Posted: Dec 14, 2009 1:20 PM

Shares of drug research contractor Pharmaceutical Product Development Inc. rose Monday on analyst expectations for increased contract bookings.

Jefferies company analyst David Windley said the company's new Chief Executive David Grange has positioned the company to retake market share from competing firms like Quintiles, Covance and others.

Windley says Grange has moved the company away from a rigid business model toward "a more client-oriented model, where various types of contracts can coexist."

The analyst upgraded the company from "Hold" to "Buy," and raised its price target to $26 from $23.

Company shares rose $1.06, or 5.1 percent, to $22.01 in midday trading.

Companies like Pharmaceutical Product Development conduct the initial and midstage studies of potential drug therapies for pharmaceutical companies like Pfizer Inc., Merck & Co. and others.

Windley writes that the company's weak contract bookings will continue to weigh on earnings growth in the near-term, but recent business model changes should boost performance in 2010.