PDI says large client won't renew pact |
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Thu, 22 Mar 2007 03:42
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SADDLE RIVER, N.J. (AP) - PDI Inc., a provider of contract, outsourced services to drug companies, on Wednesday said a large customer will not renew its contract sales engagement, worth $35 million in annual revenue.The one-year contract with the large unidentified pharmaceutical company expires May 12, although PDI had expected an extension until the end of 2007.The news comes less than a month after PDI announced British drug maker AstraZeneca PLC ended its fee-for-service agreements with the company. This lost contract affected about 800 PDI field representatives and resulted in the loss of about $65 million to $70 million in revenue for 2006.The company posted 2006 revenue of $239.2 million.On Wednesday, Chief Executive Michael Marquard said in a statement, 'This new development is disappointing and underscores the importance of our strategy, which focuses on diversifying our revenue stream.'PDI said it will now have an estimated cash burn rate of $15 million, from a previous burn rate of $10 million.A burn rate is the rate at which a company uses up venture capital to finance overhead before generating positive cash flow from operations.Shares fell 92 cents, or 8.8 percent, to $9.52 during aftermarket electronic trading, after closing up 19 cents at $10.44 on the Nasdaq Stock Market.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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