This article has been updated to include previously unreported news about PPD's restructuring plan.
NEW YORK, July 17 - PPD has shuttered its functional genomics facility Menlo Park, Calif., as the company undergoes a broad restructuring, PPD said yesterday.
PPD also said it will consolidate its discovery sciences muscle in Morrisville, NC, and Middletown, Wis., "to streamline its chemistry and preclinical resources for lead optimization," PPD said in a statement.
"These strategic decisions better align our company with market drivers," PPD CEO Fred Eshelman said in the statement. "By priming drug candidates for development, lead optimization allows us to provide our clients an integrated portfolio of services along the R&D continuum while also helping to grow our internal pipeline."
PPD employs 50 people in its Meno Park facility. Louise Caudle, a company spokeswman, said that these staffers will have the opportunity to apply for other jobs at the company. PPD said it employs around 5,600 people in 26 countries worldwide.
The restructuring includes a significant agreement with SurroMed, also announced yesterday, in which PPD gave SurroMed an undisclosed cash payment and a range of cancer biomarkers from the Menlo Park facility in exchange for $24 million worth of SurroMed's senior preferred stock.
SurroMed said it intends to use PPD's biomarkers to take a stab at cancer diagnostics, and that it also plans to seek to partner related cancer therapeutic opportunities." The company will also relocate to PPD's erstwhile Menlo Park space. The transactions are expected to close next month.
Additionally, PPD will over the next four years buy biomarker-discovery services from SurroMed, and will become SurroMed's "non-exclusive representative" for sales of additional biomarker-discovery services, the companies said.
"We believe that the collaboration with PPD will allow SurroMed to achieve positive cash flow and sustainability and to expand our leadership position in the field of biomarker discovery," Gordon Ringold, CEO and chairman of SurroMed, said in a separate statement.