PharmaNet swings to 1Q loss on contract cancellations
PRINCETON, N.J.—Drug development services company PharmaNet Development Group Inc. said Thursday it swung to a first-quarter loss, citing continued contract cancellations.
The disappointing results sent shares plunging $7.28, or 30.5 percent to $16.58 in premarket electronic trading, setting the stock up to open at nearly a two-year low. Shares closed at $23.86 Wednesday.
The company lost $10.1 million, or 53 cents per share, in the quarter ended March 31, compared with a profit of $6.6 million, or 35 cents per share, during the same period a year before. Revenue fell slightly to 107.4 million from $107.7 million.
Analysts polled by Thomson Financial predicted profit of 30 cents per share on revenue of $94.6 million.
PharmaNet's early-stage development unit had sales of $37.6 million, marking a 27 percent boost. But its late-stage development unit posted $49.2 million in sales, down 11 percent from last year. The company has seen $59 million in cancellations over the past two quarters.
Meanwhile, expenses rose 16 percent to $114.9 million.
The company lowered its guidance for direct revenue to between $390 million and $399 million for the full-year. Previous guidance ranged from $401 million to $409 million. PharmaNet did not provide an outlook for out of pocket reimbursements, which account for about 25 percent of revenue.
