Pharmanet Development Grp (MM) (NASDAQ:PDGI)
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PharmaNet Development Group, Inc. (the “Company”) (NASDAQ: PDGI),
announced today that it is working with its financial advisor to pursue
strategic alternatives, including the potential sale of the Company and
the exploration of alternatives to retire the Company’s convertible
notes.
“The Board of Directors and management believe that pursuing strategic
alternatives will maximize shareholder value,” commented Jeffrey P.
McMullen, president and chief executive officer. “I strongly believe
this approach will provide a more positive outcome for our clients and
employees.”
In connection with this process, the Company recently received several
confidential, non-binding written expressions of interest from a number
of parties, none of whom are direct competitors. The Company does not
intend to comment further on the strategic alternative process unless or
until a definitive agreement has been reached or the Company changes its
strategic direction. UBS Investment Bank is working as the Company’s
financial advisor.
The Company has decided to allow its exchange offer for its outstanding
convertible notes, which was previously announced on November 20, 2008,
to terminate at its expiration time and date of 11:59 PM on December 18,
2008. Subsequent to the commencement of the exchange offer, certain
holders of the convertible notes who had indicated to the Company their
intention to tender their convertible notes in the exchange offer,
instead sold them in the open market.
Based on discussions with the current holders of a majority of the
aggregate principal amount of the convertible notes, the Company
understands that they do not intend to tender their convertible notes in
accordance with the terms of the exchange offer. The Company continues
to have discussions with these current noteholders.
About PharmaNet Development Group,
Inc.
PharmaNet Development Group, Inc., a global drug development services
company, provides a comprehensive range of services to the
pharmaceutical, biotechnology, generic drug and medical device
industries. The Company offers early and late stage consulting, Phase I
clinical studies and bioanalytical analyses, and Phase II, III and IV
clinical development programs. With approximately 2,500 employees and 41
facilities throughout the world, PharmaNet is a recognized leader in
outsourced clinical development. For more information, please visit our
website at www.pharmanet.com.
Forward-Looking Statements
Certain statements made in this press release are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 (the "Act"). Additionally, words such as "seek,"
"intend," "believe," "plan," "estimate," "expect," "anticipate" and
other similar expressions are forward-looking statements within the
meaning of the Act. Some or all of the results anticipated by these
forward-looking statements may not occur. Factors that could cause or
contribute to such differences include, but are not limited to, the risk
and uncertainty in connection with a strategic alternative process, not
having sufficient funds to pay the principal due upon conversion of the
outstanding notes or to repurchase our outstanding notes, which we may
be required to do beginning in August 2009, the impact of the current
economic environment, the impact of our indebtedness on our financial
condition or results of operations and the terms of our outstanding
indebtedness limiting our activities, the impact of the investigation by
the US Securities and Exchange Commission, our limited insurance
coverage in connection with the settled securities class action lawsuit,
limited additional coverage for the recently settled derivative actions
and associated future legal fees, the potential liability related to the
recently filed securities class action lawsuit, the impact of on-going
tax audits, our ability to generate new client contracts and maintain
our existing clients’ contracts, our evaluation of our backlog and the
potential cancellation of contracts, the possibility we under-price our
contracts or overrun cost estimates and the effect on our financial
results by failure to receive approval for change orders and by delays
in documenting change orders, our ability to implement our business
strategy, international economic, political and other risks that could
negatively affect our results of operations or financial position,
changes in outsourcing trends and regulatory requirements affecting the
branded pharmaceutical, biotechnology, generic drug and medical device
industries, the reduction of expenditures by branded pharmaceutical,
biotechnology, generic drug or medical device companies, actions or
inspections by regulatory authorities and the impact on our clients’
decisions to not to award future contracts to us or to cancel existing
contracts, the impact of healthcare reform, the fact that one or a
limited number of clients may account for a large percentage of our
revenues, the incurrence of significant taxes to repatriate funds, the
fluctuation of our operating results from period to period, our
assessment of our goodwill valuation, the impact of foreign currency
fluctuations, tax law changes in Canada or in other foreign
jurisdictions, investigations by governmental authorities regarding our
inter-company transfer pricing policies or changes to their laws in a
manner that could increase our effective tax rate or otherwise harm our
business, our lack of the resources needed to compete effectively with
larger competitors, our ability to continue to develop new assay methods
for our analytical applications, or if our current assay methods are
incorrect, our ability to compete with other entities offering
bioanalytical laboratory services, our potential liability when
conducting clinical trials, our handling and disposal of medical wastes,
failure to comply with applicable governmental regulations, the loss of
services of our key personnel and our ability to attract qualified
staff, the continued effectiveness and availability of our information
technology infrastructure, losses related to our self-insurance of our
employees’ healthcare costs in the US, our ability to attract suitable
investigators and volunteers for our clinical trials, the material
weaknesses relating to our internal controls, and risks and
uncertainties associated with discontinued operations.
Further information can be found in the Company’s risk factors contained
in its registration statement and the included prospectus, its Annual
Report on Form 10-K for the year ended December 31, 2007, and most
recent filings. The Company does not undertake to update the disclosures
made herein, and you are urged to read our filings with the Securities
and Exchange Commission.