Prospectus Summary from S-1
“We are a leading provider of drug development services to the biopharmaceutical industry, focused on helping our customers bring their new medicines to patients around the world. We have been in the drug development services business for more than 30 years, providing a comprehensive suite of clinical development and laboratory services to pharmaceutical, biotechnology, medical device and government organizations, as well as other industry participants. Over that time, we have developed a track record of consistent quality, delivery and continuous innovation that has enabled us to grow faster than our underlying market over the past five years and deliver strong financial results. In 2018, we served all of the top 50 biopharmaceutical companies in the world, as ranked by 2018 research and development (“R&D”) spending, and were involved in 66 drug approvals. We also participated in the development of all of 2018’s top ten selling drugs, as ranked by 2018 revenue. Since 2014, we have also worked with over 300 companies in the growing biotechnology sector through our PPD Biotech model, which was built specifically to serve the unique needs of this customer segment.”
Underwriters listed in S-1
Lead Underwriters: JP Morgan, Morgan Stanley, & Goldman Sachs
Competitors
Medpace, Clintec, PRA Health Sciences, Kcrcro. ICON, IQVIA, PSI, Parexel
Notes
- specializes in drug development services for biopharmaceutical companies
- greatest priority is speed
- PPD uses seasoned drug expertise with cutting edge software to aid companies aiming to accelerate their drug approvals and global distribution
- PPD has been a top provider for drug developmental services over the past 30 years
- involved in expediting drug approvals for companies
- PPD built a biotech model that was created to serve companies in the growing biotechnology sector
- PPD Acquired Evidera Holdings, a provider of evidence based data to display real world effectiveness of products in current development, for $170.5 mm (sept. 2016)
- PPD purchased Synexus, a global clinical reasearch network, for $267.1 mm (May 2016)
Financial Notes
- PPD is comprised of two segments: Clinical Developmental Services & and Labratory Services
- The Clinical Developmental Services segment has accounted for over 80% of the net revenue for the past 5 years
2016=83.4% of rev
2017= 83.8% of rev
2018= 82.3% of rev - Total Net Revenue
Revenues increased 7.7 % from 2018 to 2019 as displayed below
2019= $2.9 bn 9 months ending Sept 30, 2019 (Estimated $3.97 bn for full year)
2018= $3.7 bn ($2.7bn in terms of 9 months ending Sept 30, 2019)
2017= $3.01 bn
2016= $2.67 bn - Cash= $403.39 mm (as of 9/30/19)
- Working Capital= $87.47 mm (as of 9/30/19)
- Total Assets= $5.58 bn (as of 9/30/19)
- Debt= $5.645 bn (as of 9/30/19)
Personal Thoughts
After thoroughly reviewing PPD’s S-1 statement, I have mixed feelings regarding this company. I really like PPD’s angle in the biotech sector as its clinical development services segment has proven to be extremely successful over the years. Honestly, I see PPD doing very well solely because of its glowing pharmaceutical development service track record. Additionally, a lack of competition in this field combined with a teaming number of biotech companies make PPD’s continual success promising. However, in so far as stock growth, I do not see this IPO spiking 10%+ within the first few days due to its $1.86 billion offer amount. Keep in mind, unicorn IPOs (IPO’s with an offer amount greater than $1 billion) have only returned 12% gains within the past 5 years. Additionally, REYN, a massive consumer products company, IPO’d last week with an offer amount similar to that of PPD. As expected, REYN didn’t preform too well in its IPO debut with a minimal 4.45% gain after its second day trading. With that being said, I do not see PPD preforming above average in its IPO debut. Thus, in order to see maximized returns, one should recognize that the investment is long term rather than short term and will require patience as an investor.