Pharmaceutical Development, a contract research organization and drug development firm, is acquiring a CRO based in Smolensk, Russia.

InnoPharm offers Phase II through IV clinical trials, data management and biostatistics services in Russia and the Ukraine. It has more than 300 people.

Financial details of the deal were not disclosed.

The deal coupled with the latest quarterly financial results announced on Wednesday gave PPD (Nasdaq: PPDI) stock a boost in trading on Thursday. Shares traded at $43.60, up $1.54, or 3.7 percent trading in afternoon trading.

"With more than 143 million people in Russia alone, Eastern Europe is a high-growth market for clinical trials and a region PPD has targeted for expansion," said Fred Eshelman, PPD’s chief executive officer. "We have subcontracted work to InnoPharm since 2004 and have great confidence in the team’s clinical research capabilities and its commitment to quality. In addition to extending our geographic footprint and enhancing our ability to conduct global studies for our clients, we are gaining a high-caliber group of clinical research professionals."

PPD has operations in 30 countries and employs more than 10,200 people.

In the earnings report, PPD generated $375 million in the fourth quarter of 2007, up 15 percent from the same period in 2006. Earnings totaled $56 million, down $2 million from the 2006 quarter. Earnings dipped 1 cent to 34 cents per share. PPD sited a $3.4 million increase in research and development costs as one reason for the earnings decline.

For the year, PPD reported revenues of $1.4 billion, up from $1.25 billion in 2006. Net revenues reached $230 million, up from $220 million.

Douglas Tsao, an analyst at Lehman Brothers, reaffirmed his “overweight” rating for PPD stock with a target price of $52.

"This ends a challenging year for PPD and the fourth quarter showed signs that the headwinds haven’t fully abated," Lehman Brothers analyst Douglas Tsao said in a note to investors. "However, we believe the [latest] acquisition and new business wins indicate things are moving in the right direction after PPD solidified its management team in recent months."

Banc of America Securities’ Jon Wood stuck with his “buy” rating and a target stock price of $48.

"The addition should hasten its (PPD’s) ability to capture new business wins in emerging markets where outsourcing penetration is accelerating," he said.

At Goldman Sachs, Randall Stanicky lists PPD as a “buy” with a target price of $55.

Eric Coldwell, an analyst at Robert W. Baird, still has PPD rated as “neutral” with a stock target price of $48. According to the Associated Press, Coldwell said the company may have to rely on its own drug discovery program to increase revenues. PPD is partnering with Takeda to develop the diabetes drug SYR-322 and upside in 2008 could hinge on whether it receives Food and Drug Administration approval, the AP reported him as saying.