In late October, when PPD, Inc. (NSDQ: PPDI) acquired fellow CRO Excel PharmaStudies, we suggested more CRO consolidation might follow. However, it was both a surprise – and not a surprise – when the news broke that PPD would follow up its Excel transaction with another major CRO acquisition, BioDuro LLC (see story). The 660 employees of BioDuro, which is based in Beijing, focus on drug discovery.

As Greg Scott, our Executive Editor, points out, the acquisition was interesting because it gives PPD a pre-clinical capability in China, and it shows the company is deeply committed to building a major China presence. The two deals put PPD on a par with, or even possibly ahead of other major western CROs – Quintiles, Covance (NYSE: CVD), Charles River (NYSE: CRL) – that have expanded into China. We expect more M&A activity will occur in China’s highly fragmented CRO industry.

Here are the stocks added to the Zacks #5 Rank ("strong sell") List today:

• American Dairy Inc (ADY)
• Cal Dive International Inc (DVR)
• CapitalSource Inc (CSE)
• Covance Inc (CVD)
• CVR Energy Inc (CVI)
• DRI Corp (TBUS)
• TFS Financial Corp (TFSL)