Covance Announces $187 Million Dedicated Space Agreement
PRINCETON, N.J., June 14, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- Covance Inc. (NYSE: CVD) announced today that it has been awarded the largest contract in its history, an extended and expanded dedicated space agreement with a minimum value of $187 million. This new contract effectively secures toxicology space for a client from 2007 to 2013 and will add approximately $150 million to the company's second quarter backlog, the majority of which will be converted to revenue between 2009 and 2013.
"For the second time this year, a company has decided to outsource a significant portion of its GLP toxicology work to Covance under a dedicated space contract," said Joe Herring, Covance Chairman and CEO. "The expansion of our relationship with this client is a testament to the strength of strategic collaboration as well as our ongoing focus on process excellence and client service delivery. We have worked closely with this client to fully understand their needs for integrated preclinical services, including bioanalytical and metabolism capabilities, to efficiently and accurately test the safety and efficacy of new drug candidates."
"Our dedicated space model offers a win-win proposition for both our clients as well as for Covance," said Wendel Barr, Corporate Senior Vice President and co-President of Covance Early Development Services. "The sponsor obtains guaranteed long-term capacity and infrastructure to run a broad array of preclinical studies, enabling the future development of its pipeline without logistical constraints. Due to the increased project visibility from the strategic relationship, Covance is able to maximize capacity and resources as well as provide higher levels of quality, speed, and efficiency. Our continued progress with the dedicated space model signals changing market dynamics that creates significant strategic opportunities for Covance."
Covance, with headquarters in Princeton, New Jersey, is one of the world's largest and most comprehensive drug development services companies with annual revenues greater than $1 billion, global operations in more than 20 countries, and more than 7,400 employees worldwide. Information on Covance's products and services, recent press releases, and SEC filings can be obtained through its website at http://www.covance.com.
Statements contained in this press release, which are not historical facts, such as statements about prospective earnings, savings, revenue, operations, revenue and earnings growth and other financial results are forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements including the statements contained herein regarding anticipated trends in the Company's business are based largely on management's expectations and are subject to and qualified by risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, without limitation, competitive factors, outsourcing trends in the pharmaceutical industry, levels of industry research and development spending, Covance's ability to provide the services called for in the agreement and realize the anticipated revenues, and other factors described in the Company's filings with the Securities and Exchange Commission including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The Company undertakes no duty to update any forward looking statement to conform the statement to actual results or changes in the Company's expectations.