<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 9, 2000
QUINTILES TRANSNATIONAL CORP.
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 340-23520 56-1714315
(State or other (Commission File No.) I.R.S. Employer
jurisdiction Identification Number
of incorporation)
4709 CREEKSTONE DRIVE, RIVERBIRCH BUILDING, SUITE 200,
DURHAM, NORTH CAROLINA 27703-8411
(Address of principal executive offices)
(919) 998-2000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 5. OTHER EVENTS.
On March 8, 2000, Quintiles Transnational Corp. issued the press
release attached hereto as Exhibit 99.01 and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Exhibit Number Description of Exhibit
- -------------- ----------------------
99.01 Press Release, dated March 8, 2000 of Quintiles
Transnational Corp.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
QUINTILES TRANSNATIONAL CORP.
By: /s/ James L. Bierman
----------------------------
Dated: March 9, 2000 James L. Bierman
Chief Financial Officer
<PAGE> 4
EXHIBIT INDEX
Exhibit Number Description of Exhibit
- -------------- ----------------------
99.01 Press Release, dated March 8, 2000 of Quintiles
Transnational Corp.
<PAGE> 1
EXHIBIT 99.01
FOR IMMEDIATE RELEASE www.quintiles.com
CONTACT: Pat Grebe, Media Relations ([email protected])
Greg Connors, Investor Relations ([email protected])
(919) 998 2000
QUINTILES TRANSNATIONAL REPORTS INTERNET INITIATIVE
AND RESTRUCTURING PROCEEDING; PROVIDES UPDATE ON OUTLOOK
RESEARCH TRIANGLE PARK, N.C. - March 8, 2000 - Quintiles Transnational Corp.
(Nasdaq: QTRN) today announced that its initiative to Internet-enable the
clinical trials, product commercialization and informatics delivery processes is
under way and that its previously announced restructuring is nearing completion.
The company also provided an update of its future business outlook.
Teams from Quintiles and its Internet development strategic ally,
Healtheon/WebMD, have had initial meetings to lay out priorities and timelines.
Quintiles plans to provide Healtheon/WebMD with up to $100 million over the next
18 months to develop Internet products and services in three areas: drug
development, physician detailing and direct-to-consumer information delivery.
Quintiles and Healtheon/WebMD's obligations are subject to completion of the
previously announced agreement for Healtheon/WebMD to purchase Quintiles' ENVOY
subsidiary. The sale, which is subject to regulatory approval and customary
conditions, is expected to be completed in the first or second quarter.
"We're laying the groundwork for a secure Internet platform that I believe will
lead to dramatically faster, more cost-effective clinical development and
product commercialization," said Dennis Gillings, Ph.D., Chairman and Chief
Executive Officer of Quintiles Transnational Corp. "Our customers have expressed
keen interest in our ability to deliver this."
Quintiles' Internet initiatives are occurring simultaneously with its previously
announced restructuring. The restructuring, which includes reduction of its
global workforce by about 800 positions and the consolidation of several
offices, is nearing completion.
This previously announced restructuring is targeted to result in annualized cost
savings of $40 million to $50 million, of which $30 million to $35 million are
targeted to be realized in 2000. As part of this restructuring, Quintiles
currently expects to take a one-time restructuring charge of approximately $55
million in first quarter 2000.
"We've made great strides in implementing our restructuring to produce a flatter
organization that's aligned with the business drivers of our customers,"
Gillings said. "We're also making good progress in creating Web-connected,
internal business-to-business shared services centers to consolidate our
finance, human resources and information technology operations worldwide, which
we believe will result in cost-savings over the long term and result in better
and faster service.
"Our pharmaceutical customers also are under pressure to increase efficiency to
maintain their traditional growth rates. As a result, they are turning to the
kind of creative partnering
<PAGE> 2
arrangements that Quintiles can offer, such as strategic alliances, preferred
partner and gain-sharing agreements. We have had success in developing new
business in these areas over the past two months, and we have taken
encouragement from the robust biotechnology sector and its pipeline.
"Given the market environment, and our Internet strategy, we believe Quintiles
is ideally suited as the leader with expertise and resources to Web-enable
product development, commercialization and informatics, cutting time and costs
to fit the new competitive paradigm. Our planned leadership efforts include
pioneering standards for Web-enabled clinical trials and commercialization
transactions, and developing Web-based clinical research and product marketing
for rapidly emerging economies, such as China. We're also moving quickly on a
major upgrade of our Corporate Web site, www.quintiles.com.
"The tremendous opportunities offered in these areas necessitate larger
investments on Quintiles' part than previously envisioned. These will parallel
our investment in Informatics, which is taking shape in an accelerated manner.
For example, the first of our QUINTERNET(TM) Series of e-health products, Rx
Market Monitor(TM) is in beta testing with several major pharmaceutical
companies and has handled more than 12,000 real-time queries across 14
therapeutic classes in its first month. Our next product in the QUINTERNET
Series, Rx Dosage Insight(TM), is slated for beta testing in the next several
weeks, and further real-time market intelligence products, Pharmacy Cost
Analyzer(TM) and MD Profiler(TM), are well on their way."
Commenting further, Gillings said: "Prior to completion of the majority of our
restructuring plans, we deliberately did not provide guidance as to earnings for
2000 on a quarterly basis because of the dynamic nature of what we were doing.
Evidence of that is clear from the range of potential earnings per share that
could result in 2000 due to the rate at which the restructuring is implemented,
the date of closing of the sale of ENVOY, any profit from the sale of ENVOY, the
accounting treatment for the sale of ENVOY, and the timing and pace of rebound
in clinical operations.
"While we have positioned ourselves well to serve expected growth in the CRO and
CSO industries over the long-term, the short-term outlook has proven even more
volatile than we expected for the CRO industry and, to a lesser extent, for the
CSO industry in Europe. This has been exacerbated by recently announced
pharmaceutical company mergers that have caused reviews of drug development
pipelines and a slowdown in decision making. As a result, we now anticipate
lower than expected revenue and significantly lower than expected core operating
earnings per share for the first half of the year as compared to analysts'
consensus expectations. Assuming this part of our industry returns to normal, we
target annualized operating earnings per share growth, before costs related to
our Web-enablement initiatives, of 20 percent to 25 percent for our continuing
operations for the second half of the year over the same period in 1999.
"Our growth targets for earnings per share, of course, exclude any profit that
arises from the proposed sale of ENVOY. We believe our sale of ENVOY will have
many long-term benefits after the profit from the sale is realized. Upon
completion of the proposed sale, we will receive $400 million in cash and 35
million shares of Healtheon/WebMD common stock. Additionally we will receive
important healthcare data rights and vigorously push forward our visionary
Web-enabling alliance. We believe the stock and cash proceeds and the data
access and alliance aspects of the proposed transaction will add real ongoing
value to Quintiles."
<PAGE> 3
Gillings concluded: "This is the year for us to lead strongly by continuing to
build an Internet foundation for our business, and to take advantage of our
global reach. We are fashioning a lean, responsive worldwide organization
designed to capture larger market share in the next generation of drug
development, commercialization and informatics. We are confident of our
long-term prospects and, as an expression of that confidence, we previously
announced a stock repurchase program, which remains in effect. As pharmaceutical
customers complete their pending mergers and analyze their drug portfolios, we
expect the clinical development industry to stabilize and return to growth, and
we plan to be there with remarkable real-time products."
Quintiles Transnational Corp. improves healthcare by bringing new medicines to
patients faster and providing knowledge-rich medical and drug data to advance
the quality and cost effectiveness of healthcare. Quintiles is the global market
leader in helping pharmaceutical, biotechnology and medical device companies
market and sell their products; the company also provides insightful market
intelligence and strategic analyses to support healthcare decisions.
Headquartered near Research Triangle Park, North Carolina, Quintiles employs a
global workforce operating from offices in 31 countries. Quintiles Transnational
is a member of the S&P 500, Fortune 1000 and Nasdaq 100. For more information
visit www.quintiles.com.
Information in this press release contains "forward-looking statements" about a
number of matters, including the planned restructuring, the anticipated
Healtheon/WebMD transaction, our Internet strategy, and targeted financial
results during various periods in 2000. These statements involve risks and
uncertainties that could cause actual results to differ materially, including
without limitation, our ability to efficiently distribute backlog among
therapeutic business units and match demand to resources, actual operating
performance, the actual savings and operating improvements resulting from the
restructuring, the ability to maintain large client contracts or to enter into
new contracts, overall industry conditions, the ability to create data products
from data licensed to us, the ability to operate successfully in new lines of
business, the ability of the recently combined businesses to be integrated with
Quintiles' current operations and, with respect to our proposed transaction with
Healtheon/WebMD, actual completion of the transaction, risks associated with
Healtheon/WebMD's business as set forth in its filings with the Securities and
Exchange Commission, and final accounting treatment, which is subject to
regulatory review. Additional factors that could cause actual results to differ
materially are discussed in the company's recent filings with the Securities and
Exchange Commission, including but not limited to its S-3 and S-4 Registration
Statements, its Annual Report on Form 10-K, its Form 8-Ks, and its other
periodic reports, including Form 10-Qs.
# # #
