8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 6, 2008

PHARMACEUTICAL PRODUCT DEVELOPMENT, INC.

(Exact name of Registrant as specified in its charter)

North Carolina

(State or other jurisdiction of incorporation)

0-27570	56-1640186
(Commission file Number)	(IRS Employer ID Number)

929 North Front Street, Wilmington, North Carolina 28401

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code 910-251-0081

NA

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act

¨ Pre-commencement communications material pursuant to Rule 14d-2(b) under the Exchange Act

¨ Pre-commencement communications material pursuant to Rule 13e-4(c) under the Exchange Act

Item 2.02 Results of Operations and Financial Condition.

On February 6, 2008, the Company issued a press release announcing its operating and financial results for the quarter and twelve months ended December 31, 2007. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by reference.

The information furnished in this Item, including the exhibit, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Press release dated February 6, 2008 of Pharmaceutical Product Development, Inc. announcing its operating and financial results for the quarter and twelve months ended December 31, 2007. (Furnished pursuant to Item 2.02, not filed; see Item 2.02 above.)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Pharmaceutical Product Development, Inc.
Date: February 6, 2008	By:	/s/ Daniel Darazsdi
	Name:	Daniel Darazsdi
	Title:	Chief Financial Officer

EX-99.1

PPD Announces Fourth Quarter and Year-End 2007 Earnings

Exhibit 99.1

Contacts:

Dan Darazsdi

+910 558 7915

dan.darazsdi@wilm.ppdi.com

Craig Eastwood

+910 558 7585

craig.eastwood@wilm.ppdi.com

FOR IMMEDIATE RELEASE

PPD REPORTS FOURTH QUARTER AND YEAR-END 2007 FINANCIAL RESULTS

Highlights:

• Q4 2007 new authorizations of $613 million

• Q4 2007 book to bill ratio of 1.44

• Backlog at December 31, 2007 of $2.65 billion, an increase of 19 percent year-over-year

WILMINGTON, NC, February 6, 2008 - PPD, Inc. (Nasdaq: PPDI) today reported its financial and operating results for the fourth quarter and full year ended December 31, 2007.

PPD recorded net revenue of $375.0 million for the fourth quarter of 2007, an increase of 15.0 percent over net revenue of $326.2 million for the fourth quarter of 2006. Fourth quarter 2007 income from operations was $56.0 million, compared to income from operations of $58.0 million for the same period in 2006. Research and development expense for the fourth quarter 2007 was $5.0 million, compared to $1.6 million for the same period last year. The increase in R&D expenses was related to the costs incurred in conducting trials for PPD’s statin compound for the treatment of dyslipidemia. Fourth quarter 2007 earnings per diluted share were $0.34, compared to earnings per diluted share of $0.35 for the same period last year.

Net revenue for the full year ended December 31, 2007 was $1.4 billion, an increase of 13.4 percent over net revenue of $1.25 billion for 2006. Full year 2007 income from operations was $230.0 million compared to 2006 income from operations of $220.0 million. Research and development expense for the full year 2007 was $19.2 million compared to $5.4 million for 2006. As with fourth quarter 2007, the increase in R&D expenses was due to costs incurred on PPD’s statin compound. Earnings per diluted share for full year 2007 were $1.36, compared to earnings per diluted share of $1.32 over the same period in 2006.

Development

Development segment net revenue for the fourth quarter of 2007 was $334.9 million, an increase of 15.1 percent over the same period in 2006. Development segment income from operations for the fourth quarter of 2007 was $59.1 million, compared to $58.7 million for the same period in 2006.

Full year 2007 development segment net revenue was $1.28 billion, an increase of 14.6 percent compared to 2006. Development segment income from operations for the full year 2007 was $246.6 million, an increase of 17.1 percent compared to development segment income from operations of $210.6 million in 2006.

PPD Announces Fourth Quarter and Year-End 2007 Earnings

Discovery Sciences

Discovery sciences segment net revenue for the fourth quarter of 2007 was $6.4 million, compared to $5.2 million in the same period last year. Discovery sciences segment fourth quarter 2007 loss from operations was $3.1 million, compared to a loss from operations of $0.7 million for the fourth quarter of 2006.

Full year 2007 discovery sciences segment net revenue was $20.0 million, compared to $33.2 million in 2006. Full year 2006 discovery sciences segment net revenue included a $15.0 million milestone payment for the start of the Phase III clinical trial for Takeda’s DPP-4 candidate. Discovery sciences segment loss from operations for 2007 was $16.6 million, compared to income from operations of $9.4 million for 2006.

Other Financial Information

Gross new business authorizations for the fourth quarter of 2007 totaled $613 million, a 23.8 percent year-over-year increase. The cancellation rate for the fourth quarter 2007 was 19.7 percent, resulting in a book to bill ratio of 1.44. Backlog at December 31, 2007 was $2.65 billion, an 18.6 percent increase over backlog at December 31, 2006. Net days sales outstanding at December 31, 2007 for the full year 2007 were 50.8 days. Cash flow from operations for the fourth quarter 2007 was $80.5 million, resulting in full year 2007 cash flow from operations of $226.7 million, a 21.0 percent increase compared to full year 2006 cash flow from operations. At December 31, 2007, PPD had $502.4 million in cash, cash equivalents and short-term investments, and no long term debt.

“PPD closed out 2007 with a solid finish in Q4 as evidenced by strong bookings, an exceptional book-to-bill ratio and a backlog of $2.65 billion,” said Fred Eshelman, chief executive officer of PPD. “With this finish and our new senior management team in place, our development business is positioned for solid performance in 2008. In addition, with the advancement of several of our compound collaborations, including Takeda’s submission of the alogliptin NDA in late December, we are particularly excited about the potential maturation of our compound partnering business”.

PPD will conduct a live conference call and audio webcast tomorrow, February 7, 2008, at 9:00 a.m. EST to discuss fourth quarter and 2007 year-end results. A Q&A session will follow. To access the webcast, please visit http://www.ppdi.com and follow the directions under the Investor Presentations & Events link in the Corporate section of the PPD Web site. A replay of the webcast will be available shortly after the call. The conference call will be broadcast live over the Internet, and the live call may be accessed via the following direct dial numbers:

Participant toll free dial in: +877 644 0692

Conference ID: 30076135

PPD is a leading global contract research organization providing discovery, development and post-approval services as well as compound partnering programs. Our clients and partners include pharmaceutical, biotechnology, medical device, academic and government organizations. With offices in 30 countries and more than 10,200 professionals worldwide, PPD applies innovative technologies, therapeutic expertise and a commitment to quality to help its clients and partners maximize returns on their R&D investments and accelerate the delivery of safe and effective therapeutics to patients. For more information, visit our Web site at http://www.ppdi.com.

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PPD Announces Fourth Quarter and Year-End 2007 Earnings

Except for historical information, all of the statements, expectations and assumptions contained in this news release, including expectations and assumptions about company growth and the prospects of PPD’s compound partnering, are forward-looking statements that involve a number of risks and uncertainties. Although PPD attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors which could cause actual results to differ materially include the following: continued success in sales growth; loss of large contracts; increased cancellation rates; failure or refusal of the FDA to accept or approve the NDA for alogliptin, risks associated with the development and commercialization of drugs, including earnings dilution and obtaining regulatory approvals; risks associated with and dependence on collaborative relationships; the ability to attract and retain key personnel; rapid technological advances that make our products and services less competitive; economic conditions and outsourcing trends in the pharmaceutical, biotechnology and medical device industries and academic and government-sponsored research sectors; competition within the outsourcing industry; risks associated with acquisitions and investments, such as impairments; and the other risk factors set forth from time to time in the SEC filings for PPD, copies of which are available free of charge upon request from the PPD investor relations department.

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PPD Announces Fourth Quarter and Year-End 2007 Earnings

PPD, Inc.

Statement of Operations Data

(in thousands, except per share amounts)

(unaudited)

	Three Months Ended December 31,					Twelve Months Ended December 31,
	2007			2006		2007			2006
Net revenue:
Development	$	334,947		$	291,119	$	1,275,399		$	1,113,106
Discovery Sciences		6,402			5,238		19,979			33,193
Reimbursed out-of-pockets		33,700			29,855		119,087			101,383
Total net revenue		375,049			326,212		1,414,465			1,247,682
Direct costs:
Development		169,251			147,259		641,902			559,819
Discovery Sciences		3,015			2,431		10,610			9,324
Reimbursable out-of-pocket expenses		33,700			29,855		119,087			101,383
Total direct costs		205,966			179,545		771,599			670,526
Research and development		5,017			1,577		19,238			5,406
Selling, general and administrative		93,039			74,129		338,055			304,035
Depreciation and amortization		15,028			12,940		55,592			47,738
Income from operations		55,999			58,021		229,981			219,977
Impairment of equity investments		(690	)		—		(690	)		—
Other income, net		5,864			4,270		18,662			15,528
Income before income taxes		61,173			62,291		247,953			235,505
Income tax expense		20,646			20,712		84,552			78,853
Net income	$	40,527		$	41,579	$	163,401		$	156,652
Net income per share:
Basic	$	0.34		$	0.35	$	1.38		$	1.34
Diluted	$	0.34		$	0.35	$	1.36		$	1.32
Dividends declared per common share	$	0.10		$	0.03	$	0.19		$	0.105
Weighted average number of shares outstanding:
Basic		118,939			117,290		118,459			116,780
Diluted		120,389			118,847		119,953			118,535

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PPD Announces Fourth Quarter and Year-End 2007 Earnings

PPD, Inc.

Balance Sheet Data

(in thousands)

(unaudited)

	December 31, 2007		December 31, 2006
Cash, cash equivalents and short-term investments	$	502,384	$	435,671
Accounts receivable and unbilled services, net	$	481,477	$	408,917
Working capital	$	599,980	$	412,711
Total assets	$	1,684,375	$	1,481,565
Unearned income	$	205,779	$	195,707
Current maturities of long-term debt	$	—	$	75,159
Shareholders’ equity	$	1,150,096	$	952,900

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