PPD Enters Into Collaboration with Merck

PPD Enters Into Strategic Collaboration with Merck

PPD acquires Merck's vaccine testing lab; Expands existing central lab service relationship

WILMINGTON, N.C. (January 5, 2009)-PPD, Inc. (Nasdaq: PPDI) today announced it has entered into a strategic collaboration with Merck & Co.,
Inc., involving vaccine testing and assay development. Under the agreements, PPD purchased Merck's 130,000 square-foot vaccine testing laboratory and related equipment in Wayne, Penn., and hired the nearly 80 Merck professionals who operate this state-of-the-art facility. As part of this collaboration, PPD will be providing Merck with assay development and immunogenicity testing services to support Merck's vaccine portfolio over a period of five years.

In addition, PPD entered into an agreement with Merck that significantly expands its existing central laboratory service relationship. Under this
agreement, PPD will be providing traditional central laboratory and sample storage services to Merck for its clinical development activities over a period of five years.

The acquisition of Merck's vaccine testing facility significantly expands PPD's overall global central laboratory business, adding world-class vaccine and biologic testing, assay development and sample storage capabilities to its current suite of laboratory services. PPD plans to invest in the newly acquired lab by developing new technologies and assays to expand its immunochemistry and oncology vaccine testing services as well as biologics lab services for other biopharmaceutical clients.

"We believe strategic outsourcing is key to the future of R&D and represents an innovative approach to the challenges facing our pharmaceutical and biotechnology clients," said Fred Eshelman, chief executive officer of PPD. "This collaboration with Merck represents a unique opportunity for us to acquire leading scientific talent and state-of-the-art facilities, expand an existing relationship with a long-time client and offer a new service line to other customers in the growing vaccine market."

Agostino L. Fede, senior vice president of PPD and head of global central labs said, "With this acquisition, we believe we are the first CRO to have a central lab that offers a comprehensive menu of assay development and testing services for vaccine clinical trials. We are delighted to have entered into this collaborative arrangement with Merck, and are excited to welcome our Merck colleagues to PPD and begin working together to grow and expand this new business unit." He added that "this transaction demonstrates PPD's collaborative approach to delivering high quality, reliable and timely laboratory services and data to key biopharmaceutical companies."

"Merck and PPD worked together during the past several months to develop a novel and robust approach to expand our long-standing and trusted relationship," said Tony Ford-Hutchinson, senior vice president, Merck Research Labs. "We found a partner that was receptive to our business needs and brought practical solutions to ensure the continuity of our operations."

The transaction closed on December 31, 2008. Financial details of the transaction were not disclosed.

PPD is a leading global contract research organization providing discovery, development and post-approval services as well as compound partnering
programs. Our clients and partners include pharmaceutical, biotechnology, medical device, academic and government organizations. With offices in 33
countries and more than 10,500 professionals worldwide, PPD applies innovative technologies, therapeutic expertise and a commitment to quality to help its clients and partners maximize returns on their R&D investments and accelerate the delivery of safe and effective therapeutics to patients. For more information, visit our Web site at http://www.ppdi.com.

Except for historical information, all of the statements, expectations and assumptions contained in this news release, including expectations and assumptions about the acquisition of this vaccine testing laboratory, revenues from vaccine testing and central laboratory services and the value of this collaboration, are forward-looking statements that involve a number of risks and uncertainties. Although PPD attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors which could cause results to differ materially include the following: risks associated with and dependence on collaborative relationships; the ability to attract and retain key personnel; loss of large contracts; increased cancellation rates; competition within the outsourcing industry; economic conditions and outsourcing trends in the pharmaceutical, biotechnology, medical device, academic and government industry segments; continued success in sales growth, including sales of future vaccine testing services; risks associated with acquisitions and investments, such as impairments; rapid technological advances that make our products and services less competitive; risks associated with the development and commercialization of drugs, including earnings dilution and obtaining regulatory approval; risks that we may not continue our dividend policy; and the other risk factors set forth from time to time in the SEC filings for PPD, copies of which are available free of charge upon request from the PPD investor relations department.