PRINCETON, N.J., July 29 /PRNewswire-FirstCall/ -- Covance (NYSE: CVD) today announced it has entered into a definitive agreement with Merck & Co., Inc. relating to the supply of genomic analysis services. Under the terms of the agreement Merck has committed to a five-year $145 million contract to purchase genomic analysis services from Covance. In addition Covance will acquire Merck's Seattle-based Gene Expression Laboratory that performs genomics services such as genotyping, gene sequencing and gene expression profiling.
"The acquisition of this laboratory brings world-class talent and technologies to Covance and further expands our capabilities in genomics testing and personalized medicine," said Joe Herring, Chairman and Chief Executive Officer of Covance Inc. "We recognized the need to expand our footprint in the important and growing genomics testing market and this transaction provided both a superior and quicker entry point than the build or buy options we considered. The overall size of the genomics market is estimated at several hundred million dollars per year, including services for discovery/preclinical and clinical trials support."
"We believe this acquisition establishes Covance as the largest genomics service provider in the world," said Deborah Tanner, Corporate Senior Vice President, President, Central Laboratory Services at Covance. "This agreement will broaden our participation in projects and partnerships with clients in the drug discovery process."
Covance expects to offer employment to the majority of current employees and is scheduled to assume occupancy of the site and operation of the Gene Expression Laboratory on August 17, 2009.
"The Gene Expression Laboratory has established a strong reputation for consistent delivery of high quality experimental data in support of Merck's external collaborations and internal research projects," said Dr. Rupert Vessey, Vice President, Merck Research Laboratories. "This agreement assures continued access to these services for our researchers while securing a future for the facility as an integral part of a world leading drug development service provider."
Covance, with headquarters in Princeton, New Jersey, is one of the world's largest and most comprehensive drug development services companies with annual revenues greater than $1.7 billion, global operations in 25 countries, and more than 10,000 employees worldwide. Information on Covance's products and services, recent press releases, and SEC filings can be obtained through its website at www.covance.com.
Statements contained in this press release, which are not historical facts, such as statements about prospective earnings, savings, revenue, operations, revenue and earnings growth and other financial results are forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements including the statements contained herein regarding anticipated trends in the Company's business are based largely on management's expectations and are subject to and qualified by risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, without limitation, the closing of the announced transaction, competitive factors, outsourcing trends in the pharmaceutical industry, levels of industry research and development spending, the Company's ability to continue to attract and retain qualified personnel, the fixed price nature of contracts or the loss of large contracts, risks associated with acquisitions and investments, the Company's ability to increase order volume, the pace of translation of orders into revenue in late-stage development services, fluctuations in currency exchange rates, and other factors described in the Company's filings with the Securities and Exchange Commission including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The Company undertakes no duty to update any forward looking statement to conform the statement to actual results or changes in the Company's expectations.
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