Kendle International, Inc.
Ticker:KNDL 700 Carew Tower
Exchange:NASDAQ-National Market Cincinnati, OH 45202
Industry:Service (SIC Code 8731) (513) 381-5550

Offering Information
Type of Shares:Common Shares Filing Date:7/2/97
U.S. Shares:3,600,000 Offer Date:8/21/97
Non-U.S. Shares:0 Filing Range:$12.00 - $14.00
Primary Shares:3,000,000 Offer Price:$14.00
Secondary Shares:600,000 Gross Spread:$0.98
Offering Amount: $46,800,000 Selling:$0.54
Expenses:$500,000 Reallowance:$0.10
Shares Out After:7,350,687

Primary Underwriting Group
ManagerTierPhone
Lehman Brothers IncorporatedLead Manager (212) 526-8100
J.C. Bradford & Co.Co-manager (615) 748-9347

Legal Counsel, Auditor and Registrar
Issuer's Law Firm: Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
Auditor: Coopers & Lybrand

Selected Financial Data

Dollar amounts in U.S. millions except for per share data
3 Month Ending Financials
Full Year
Audited
Income
Latest
Unaudited
Income
Prior
Unaudited
Income
Balance
Sheet
12/31/96 3/31/97 3/31/96 3/31/97
Revenue:$12.96$5.96$2.06Assets:$9.85
Net Income:$0.68$0.32$0.14Curr Assets:
EPS:$0.16$0.03Liabilities:$8.59
Prior EPS:-$2.30-$0.15Curr Liabilities:
Cash Flow/Oper:$3.32Equity:$1.26
Cash Flow/Fin:Cash:
Cash Flow/Inv:

Business Description
The company is a contract research organization that provides a broad range of clinical research and drug development services to the pharmaceutical and biotechnology industries. The company augments the research and development activities of pharmaceutical and biotechnology companies by offering high quality, value added clinical research services and proprietary information technology designed to reduce drug development time and expense. The Company's services include Phase II to Phase IV clinical trial design and management, clinical data management, biostatistical analysis, medical writing and regulatory consultation and representation. The company believes that it is one of a small number of CROs capable of providing a broad range of services within multiple therapeutic areas, including cardiovascular, central nervous system, gastrointestinal, immunology, oncology, respiratory, skeletal disease and inflammation. Since its inception, the company has served more than 40 clients, including 12 of the world's 20 largest pharmaceutical companies. In 1996, Kendle participated in 62 studies at approximately 4,100 sites involving approximately 20,000 patients.

Competition
The Company primarily competes against in-house research departments of pharmaceutical and biotechnology companies, universities and teaching hospitals and other full-service CROs, a number of which possess substantially greater capital, technical and other resources than the Company. CROs generally compete on the basis of previous experience, medical and scientific expertise in specific therapeutic areas, the quality of contract research, the ability to organize and manage large-scale trials on a global basis, medical database management capabilities, the ability to provide statistical and regulatory services, the ability to recruit investigators, the ability to integrate information technology with systems to improve the efficiency of contract research, an international presence with strategically located facilities, financial viability and price. The Company's failure to compete effectively in any one or more of these areas could have a material adverse effect on the Company. The CRO industry is highly fragmented, with several hundred CROs ranging from small, limited-service providers to full-service, global drug development corporations. However, the CRO industry is consolidating. This consolidation trend has been caused, in part, by the decision of pharmaceutical and biotechnology company clients to contract with fewer CROs, streamlining the outsourcing process by entering into preferred provider relationships with a few CROs or awarding a smaller number of large contracts to qualified CROs. This trend is likely to increase competition among the larger CROs for both clients and acquisition candidates and may lead to price and other forms of competition that could have a material adverse effect on the Company.

Business Plan
The company's strategy consists of the following key elements: (I continue to expand its broad range of therapeutic expertise, (ii) offer its clients "one-stop shopping" with a full range of services that encompass the clinical research process and complement the research and development departments of its clients, (iii) expedite the drug development process through innovative information technology offered via the company's proprietary TrialWare(SM) software, (iv) continue to build a broad presence that portrays high quality work and (v) supplement internal growth through strategic acquisitions that expand the company's geographic presence and add to the company's clinical research capabilities in existing or new therapeutic areas or service offerings.

Use of Proceeds
The proceeds from the proposed offering will be used to repay indebtedness incurred in connection with the U-Gene Acquisition, fund the cash portion of the gmi Acquisition, general corporate purposes, including working capital, and possible future acquisitions of related businesses..

Principal and Selling Shareholders
Name of Shareholder% Owned
Before
% Owned
After
Dr. Candace Kendle Bryan46.60%49.40%
Christopher C. Bergen36.40%15.10%
Kendle Stock Trust17.00%8.80%
Note: Represents ownership of 5% or more prior to the offering.
Executive Officers and Directors
Officer NameTitleAge
Candace Kendle Bryan, Pharm.D.Chairman of the Board and Chief Executive Officer50
Mandyam K. Srirama, Ph.D.Director, Biostatistics63
Jere M. HardyDirector, Clinical Data Management52
William K. Sietsema, Ph.D.Director, Clinical Research41
Peter F. Djuric, Pharm.D.Director, Clinical Research48
Michael F. BayerDirector, Clinical Services49
Stephen G. ScheurerDirector, Human Resources48
Gary M. WedigDirector, Information Technology47
Lois B. Rosenberger, Ph.D.Director, Regulatory Affairs46
Ann Hagen, M.D.Director, Safety Surveillance39
Philip E. BeekmanMember, Board of Directors65
Charles A. Sanders, M.D.Member, Board of Directors65
Christopher C. BergenPresident, Chief Operating Officer, Secretary and Member, Board of Directors47
Timothy M. MooneyVice President -- Finance, Chief Financial Officer, Treasurer and Member, Board of Directors49

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