Covance Wins its Largest Contract

Covance has been awarded an extended and expanded dedicated space agreement with a minimum value of $187 million, the largest contract in its history. 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’s chairman and chief executive officer. “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.”