MDS Reports Second Quarter 2009 Financi...(the prior-year period with foreign excha...),Health

Date:6/11/2009

the prior-year period with foreign exchange negatively impacting revenue by $9 million. In the second quarter, Late Stage declines were primarily due to lower demand in Central Labs. In Early Stage, declines were largely driven by lower revenues in bioanalytical services.

MDS Pharma Services recorded new business wins totaling $114 million, a sequential increase of 10%, compared with new business wins in the first quarter, but down 31% compared with $165 million of new business wins last year. The sequential improvement was primarily driven by solid orders in Phase II-IV and Early Stage bioanalytical services. The year-over-year decline was largely due to the impact of foreign exchange and slower market demand as customers reprioritize their research and development (R&D) projects. Period-end backlog was $442 million, down 11% from $496 million in the prior year. This decrease is primarily related to changes in foreign exchange and declines in Late Stage, partially offset by a 10% increase in Early Stage backlog.

As part of the Company's quarterly balance sheet assessment, a non-cash write-down of $16 million was recorded in the second quarter to reflect the current fair value of MDS Pharma Services Central Labs fixed assets.

Subsequent to the quarter, as part of its ongoing strategic review process, MDS announced that it will strategically focus MDS Pharma Services on the delivery of Early Stage (Discovery through Phase IIa) services where the Company has a top-three market position. As a result, MDS intends to sell its Late Stage (Phase II-IV and Central Labs) operations. On June 1, 2009, the Company announced an agreement to sell its Phase II-IV operations to INC Research, Inc. for approximately $50 million, including certain transition services and customary post-closing contingencies and adjustments. This sale is expected to close during MDS's fiscal third quarter of 2009 (the three months ending July 31, 2009). A suitable buyer is b
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SOURCE MDS Inc. Copyright©2009 PR Newswire. All rights reserved

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