It's a big day at contract research organization PPD (Nasdaq: PPDI). The Wilmington, N.C. company announced it's acquiring one company and selling another.

In: Magen Biosciences, a biotech firm focused on dermatologic therapies. Terms: $14.5 million in cash. That deal continues PPD's strategy of owning compounds or splitting the costs and rewards of their development.

Out: Piedmont Research Center, a provider of preclinical research and evaluation of anticancer agents and therapies. Terms: $46 million in cash.

Cleaning House

In a news release, PPD's CEO Fred Eshelman said that while Piedmont is “a solid contributor to our discovery sciences segment” that has grown nicely, in vivo and in vitro services are “somewhat of a niche operation for PPD.” It'd be a better long-term strategic fit for its new buyer, Charles River Laboratories, he said.

The deal is expected to close at the end of the second quarter. Morrisville, N.C.-based Piedmont was founded in 1997. PPD acquired it in 2002. At that time, it had 30 employees. PPD built it up to 70 employees, all of whom are being offered jobs with Charles River, a PPD spokesperson told us.

As for Waltham, Mass.-based Magen, PPD's new acquisition, its major value lies in its compound partnering deals with Eli Lilly. Though Magen is expected to post a loss of $15.2 million this year, it's worth it, as PPD gains a pipeline of compounds through Magen's exclusive license to develop and commercialize preclinical compounds discovered by Lilly for dermatologic therapeutics.

Buying Biotech

The acquisition expands PPD's compound partnering program into dermatology, initially in the indications of psoriasis, atopic dermatitis and acne. ClinPage wrote about PPD's robust compound-partnering program last spring. The story is here.

"The market is strong and growing for dermatologic products, which generally present fewer development hurdles than other therapeutics and have a more straightforward path to regulatory approval," said Eshelman. Sandra Luikenhuis, Magen's director of corporate development, will become PPD's executive director of dermatology.

Here are the company's releases on Magen and on Piedmont.

—by Suz Redfearn