PPD, Inc announced it has acquired Magen BioSciences, Inc, a biotechnology company focused on dermatologic therapies based in Waltham, Massachusetts. The acquisition expands PPD's compound partnering programme into dermatology, initially in the indications of psoriasis, atopic dermatitis and acne.

With the acquisition, PPD gains a pipeline of compounds through Magen's exclusive license to develop and commercialize preclinical compounds discovered by Eli Lilly & Co. for dermatologic therapeutics. The acquisition also provides PPD state-of-the-art research and development capability to screen dermatologic compounds to determine efficacy and safety.

"By combining Magen's unique dermal biology expertise and innovative pipeline of compounds with our extensive development experience, we hope to develop compounds that address unmet needs for major dermatological disorders," said Fred Eshelman, chief executive officer of PPD. "The market is strong and growing for dermatologic products, which generally present fewer development hurdles than other therapeutics and have a more straightforward path to regulatory approval."

Sandra Luikenhuis, who was integral in founding and growing Magen and who joined PPD with the acquisition, will oversee development of these compounds in her role as executive director, dermatology.

"We see significant potential for the discovery and development of new treatments in dermatology, where few novel products are currently being developed," said Dr Luikenhuis. "Magen's experience will be valuable in helping PPD evaluate future opportunities in this growing therapeutic area."

Under the terms of the deal, PPD purchased Magen for $14.5 million in cash. For the remainder of 2009, PPD anticipates that Magen's research and development activities will generate a loss from operations of approximately $15.2 million, or a diluted loss per share of $0.09. The quarterly 2009 diluted loss per share from the operations of Magen is expected to be as follows: Q2 - $0.03; Q3 - $0.03; and Q4 - $0.03.

PPD has also entered into a definitive agreement to sell its Piedmont Research Center business, subject to various closing conditions. Assuming it is consummated as expected in the second quarter, the net impact of this sale and the acquisition of Magen on PPD's full year 2009 financial guidance will be a reduction of projected discovery segment revenues by approximately $19.0 million and an increase in projected diluted earnings per share of approximately $0.03. The net impact of these transactions on PPD's projected quarterly diluted earnings per share is expected to be as follows: Q2 - $0.11; Q3 - ($0.04); and Q4 - ($0.04).

PPD is a leading global contract research organization providing discovery, development and post-approval services as well as compound partnering programmes. Our clients and partners include pharmaceutical, biotechnology, medical device, academic and government organizations.