Press Release: January 31, 2001

WR Hambrecht + Co Issues Industry Report On Pharmaceutical Services Industry

Firm initiates coverage on Ventiv (VTIV) with Strong Buy and Professional Detailing, Inc. (PDII) with Buy

San Francisco, CA, January 31, 2001—WR Hambrecht + Co today issued an industry report focusing on the pharmaceutical sales and marketing industry. According to the report, contract sales and marketing firms (CSOs) that serve as outsourced departments for major pharmaceutical firms and are in a position to capitalize on the estimated $13 billion spent influencing physician prescription trends. “The Pharmaceutical Services Industry: Pharmaceutical Marketing for the Millennium” is available on WR Hambrecht + Co’s website at http://www.wrhambrecht.com.

WR Hambrecht + Co’s Healthcare Technology & Pharmaceutical Services analyst Josh Fisher believes a number of industry dynamics should propel pharmaceutical companies’ use of CSO, including:

• As competition intensifies, market exclusivity shrinks, resulting in product launches designed to drive peak sales faster. CSOs have recently been used to boost marketing resources for new launches and high-growth products.
• CSOs can increase sales while converting high fixed costs to variable costs.
• CSOs have demonstrated success and continue to replicate the returns of internal sales forces, which were not measurable prior to the development of prescription tracking systems.

“We project that the traditional CSO market will double by 2004, growing from $945 million to an estimated $1.9 billion,” Fisher said. “Further, we believe gain-share deals, if they become commonplace in the pharma and biotech industries, could significantly accelerate the growth of the CSO industry.”

Fisher notes that gain-share deals in the pharmaceutical industry present a multi-billion dollar market opportunity for CSOs over the next three to five years.

In addition to his analysis of the CSO market, Fisher initiated coverage on two firms within this sector:

• Ventiv (VTIV) - Fisher believes that Ventiv’s 70 percent growth of its core U.S. CSO business, new account wins and expanded contracts have gone largely unnoticed by Wall Street. Fisher projects Ventiv to increase revenues in 2001 to $500 million. As a result, Fisher initiated coverage with a Strong Buy rating and a $25 price target.
• Professional Detailing, Inc. (PDII) - PDI recently signed profit-sharing agreement with GlaxoSmithKline, in which PDI assumed all the marketing and distribution responsibilities for Ceftin, an antibiotic that had U.S. sales of $332 million in 1999. According to Fisher, if PDI grows Ceftin sales by 8 percent, PDI will generate approximately $14 million to its 2001 net income. As a result, Fisher initiated coverage with a Buy rating with a $120 price target.