Local Tech Wire

WILMINGTON, N.C. – (Nasdaq: PPDI) will formally spin off its drug development arm as a new company as of June 14.

Called Furiex Pharmaceuticals, the new venture will trade on the Nasdaq under the symbol "FURX.”

PPD announced the spin-off date after the markets closed on Monday. The company, which is a global life sciences services provider, said last October than the spinoff would occur by mid-2010.

PPD shareholders will own Furiex, with PPDI shareholders of record as of June 1 receiving one share of Furiex for each 12 PPDI shares they own. Any fractional shares will be paid in cash, PPD said Monday.

PPD closed at $25.38 Monday.

"We believe separating these unique businesses will allow each company to better pursue its long-term strategic initiatives and compete more effectively in its respective market," said Fred Eshelman, the executive chairman and founder of PPD, in a statement. "We are confident this move is in the best interests of both companies and their respective stakeholders."

When the spinoff was announced, PPD said it would capitalize the new venture with $100 million.

Once the spinoff is complete, PPD will operate its contract research organization under that name and focus on its core life science services business.

Furiex will have rights to drugs under development that PPD is already supporting and deals that might take place before the spinoff is complete.

“While our innovative compound partnering program has benefited PPD over the years, we believe by separating this business from our core CRO [contract research organization] business we can unlock the intrinsic value of both businesses,” Eshelman said last fall.

“Each company will have the opportunity to focus exclusively on its core strengths, seek new strategic opportunities and compete more effectively in its respective market,” he added.

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