Shares in contract research organization Pharmaceutical Product Development (PPD) dropped 4 percent yesterday after the company said its president was leaving. Wall street analysts, however, are uniformly upbeat on the company’s prospects.

Everything is going smoothly at the company: revenue in the quarter was up 15 percent. Growth in its core division, clinical development, rose 23% to $53.6 million. PPD’s overall contract backlog also rose by a quarter, compared to the same period last year, hitting $2.2 billion.

Fred B. Davenport, Jr., PPD’s president, will leave the company on December 31, 2006. Of his departure, PPD said: “In his termination notice to the company, Davenport expressed his intention to pursue other professional and personal goals while he is still young and energetic.”

The company’s statement said that in the third quarter of 2006 it got a total of $531.0 million in new business; the third quarter cancellation rate, on the other hand, was 17.8 percent.

“We continued to see solid growth in a number of geographic areas and service segments within the industry, which enabled PPD to deliver another quarter of development segment revenue growth exceeding 20 percent, a net book-to-bill of 1.51 and backlog growth of 25 percent versus the same quarter last year,” Fred Eshelman, chief executive officer of PPD said in the company’s statement. “PPD’s board of directors, our management team and our employees are pleased to be able to reward our shareholders through the increase in our cash dividend rate, and we remain firmly committed to unlocking additional shareholder value through the delivery of high quality services and the advancement of our compound portfolio strategy.”

One fascinating aspect to the PPD story is the company’s drug discovery effort. 

An example is dapoxetine. In 1998, PPD bought the molecule from Eli Lilly and later chose to partner, in essence, with Johnson & Johnson (JNJ).

Dapoxetine could turn out to be the first drug approved to treat premature ejaculation, which PPD estimates may afflict a third of all men. The FDA initially rejected the drug, which is chemically similar to Prozac and other antidepressants in the SSRI class. Urologists are divided on the question of whether “premature ejaculation” is an actual physiological disease or, like the phrase “erectile dysfunction,” a term of marketing art.

Either way, research is continuing, and both JNJ and PPD believe the story will end happily. In June 2005, the New York Times described clinical trials in which the wives and girlfriends of patients taking dapoxetine timed their partners with stopwatches to see if the drug worked. As Leslie Berger of the Times reported: “In those studies, which involved 2,614 men, dapoxetine more than tripled the duration of intercourse to 2.78 minutes and 3.33 minutes from less than a minute, depending on whether the men received doses of 30 milligrams or 60 milligrams.”