10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the fiscal year ended December 31, 2006

OR

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934 For the transition period from _____________to _____________

Commission file number: 0-30318

INVENTIV HEALTH, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware (State or Other Jurisdiction No. of Incorporation or Organization) 52-2181734 (I.R.S. Employer Identification No.)

200 Cottontail Lane Vantage Court North; Somerset, New Jersey 08873

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (800) 416-0555

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: Common Stock

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [X] No [_]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes [ ] No [X]

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statement incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [X]Accelerated filer [ ]Non-accelerated filer [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [_] No [X]

Based on the closing sale price on the Nasdaq National Market as of the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting stock held by nonaffiliates of the registrant was approximately $800,988,009. For the purposes of this calculation, shares owned by officers, directors and 10% shareholders known to the registrant have been deemed to be owned by affiliates. This determination of affiliate status is not a determination for other purposes.

As of February 22, 2007, there were 30,135,993 outstanding shares of the registrant's common stock.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the registrant's annual report to security holders for the fiscal year ended December 31, 2006 are incorporated by reference into Part II of this report. Certain portions of the Registrant's Definitive Proxy Statement to be filed with the Commission for use in connection with the 2007 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K.

TABLE OF CONTENTS

Item	Description
PART I
1	Business
1A	Risk Factors
1B	Unresolved Staff Comments
2	Properties
3	Legal Proceedings
4	Submission of Matters to a Vote of Securities Holders
PART II
5	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities
6	Selected Financial Data
7	Management’s Discussion and Analysis of Financial Condition and Results of Operations
7A	Quantitative and Qualitative Disclosures About Market Risk
8	Financial Statements and Supplementary Data
9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
9A	Controls and Procedures
9B	Other Information
PART III
10	Directors, Executive Officers and Corporate Governance
11	Executive Compensation
12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
13	Certain Relationships and Related Transactions, and Director Independence
14	Principal Accounting Fees and Services
PART IV
15	Exhibits and Financial Statement Schedules

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING DISCLOSURE

STATEMENT REGARDING FORWARD-LOOKING DISCLOSURE

This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements concern expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Specifically, this report contains forward-looking statements regarding:

· our estimates regarding our liquidity, capital expenditures and sources of both, and our ability to fund our operations and planned capital expenditures for the foreseeable future;

· our strategy to address the need to offer additional services through acquisitions of other companies, including the personnel of such companies;

· our expectations regarding our pursuit of additional debt or equity sources to finance our internal growth initiatives or acquisitions;

· our belief that our growth and success will depend on our ability to continue to enhance the quality of our existing services, introduce new services on a timely and cost-effective basis, integrate new services with existing services, increase penetration with existing customers, recruit, motivate and retain qualified personnel and economically train existing sales representatives and recruit new sales representatives;

· our belief that there are ample opportunities for cross-selling to our existing clients;

· our anticipation that it will be necessary to continue to select, invest in and develop new and enhanced technology and end-user databases on a timely basis in the future in order to maintain our competitiveness;

· our expectations regarding the impact of our acquisitions, joint ventures and partnerships; and

· our expectations regarding the impact of the adoption of certain accounting standards.

These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties and assumptions. We wish to caution readers that certain important factors may have affected and could in the future affect our actual results and could cause actual results to differ significantly from those expressed in any forward-looking statement. The most important factors that could prevent us from achieving our goals, and cause the assumptions underlying forward-looking statements and the actual results to differ materially from those expressed in or implied by those forward-looking statements include, but are not limited to, the following:

· our ability to sufficiently increase our revenues and maintain or decrease expenses and cash capital expenditures to permit us to fund our operations;

· our ability to continue to comply with the covenants and terms of our credit facility and to access sufficient capital to fund our operations;

· our ability to grow our existing client relationships, obtain new clients and cross-sell our services;

· our ability to successfully operate new lines of business;

· our ability to manage our infrastructure and resources to support our growth;

· our ability to successfully identify new businesses to acquire, conclude acquisition negotiations and integrate the acquired businesses into our operations;

· any disruptions, impairments, or malfunctions affecting software as well as excessive costs or delays that may adversely impact our continued investment in and development of software;

· our ability to comply with all applicable laws as well as our ability to successfully implement from a timing and cost perspective any changes in applicable laws;

· our ability to recruit, motivate and retain qualified personnel, including sales representatives;

· the actual impact of the adoption of certain accounting standards; and

· changes in trends in the pharmaceutical industry or in pharmaceutical outsourcing.

Investors should carefully consider these risk factors and the additional risk factors outlined in more detail in Item 1A, Risk Factors, in this report.

PART I

Item 1. Business.

Overview

inVentiv Health Inc. (together with its subsidiaries, “inVentiv”, or the “Company”) is a leading provider of value-added services to the pharmaceutical and life sciences industries. On June 14, 2006, we changed our name to inVentiv Health, Inc. (from Ventiv Health, Inc.) as part of a re-branding initiative that began when we acquired inVentiv Communications, Inc. (then known as inChord Communications, Inc.) (“inVentiv Communications, Inc.” or “inChord”). We support a broad range of clinical development, communications and commercialization activities that are critical to our customers' ability to complete the development of new drug products and medical devices and successfully bring them to market. Our goal is to assist our customers in meeting their objectives in each of our operational areas by providing our services on a flexible and cost-effective basis that permits us to provide discrete service offerings in focused areas as well as integrated multidisciplinary solutions. We provide services to over 200 client organizations, including all top 20 global pharmaceutical companies and numerous emerging and specialty biotechnology companies.

Our service offerings reflect the changing needs of our clients as their products move through the late-stage development and regulatory approval processes and into product launch. We have established expertise and leadership in providing the services our clients require at each of these stages of product development and commercialization and seek to address their outsourced service needs on a comprehensive basis throughout the product life cycle through both standalone and integrated solutions. Our services assist our clients in developing, executing and monitoring strategic and tactical sales and marketing plans and programs for the promotion of pharmaceutical, biotechnology and other life sciences products.

The success of our business as a whole, and of our inVentiv Clinical and inVentiv Commercial segments in particular, is related significantly to the degree to which pharmaceutical companies outsource services that have traditionally been performed internally by fully integrated manufacturers. We believe that our business has been positively affected by a trend of large pharmaceutical manufacturers toward utilizing outsourcing arrangements as a means of controlling variable unit cost and increasing flexibility. We also believe that the increasing percentage of New Drug Application (“NDA”) and New Molecular Entity (“NME”) approvals attributable to small and mid-tier pharmaceutical and biotechnology companies presents an opportunity for companies providing outsourced services because these companies often prefer to employ high-quality, third party service providers (either directly or in co-promotion situations with pharmaceutical partners) to effect critical late-stage developmental and commercialization functions. We therefore target a broad spectrum of companies within the pharmaceutical and life sciences industry in seeking to develop business opportunities.

Our strategy relies on both internal growth and acquisitions to meet our growth objectives. Our businesses have generated strong internal revenue growth for the past few years. Our revenue growth reflects our strong track record in winning new business, which in turn, is enhanced by our pursuit of cross-servicing opportunities within and across our business segments. As a result of these successes, our customer base has become increasingly diversified within the pharmaceutical and life sciences industries, with no single customer accounting for in excess of 10% of revenues. Furthermore, although our revenues are generally received under contracts with limited terms and that can be terminated at the client’s option on short notice, we have been successful historically in obtaining increasing amounts of repeat business from our clients and in expanding the scope of the services we provide to them.

We seek out acquisitions in order to fill strategic gaps, selectively strengthen existing franchises, further strengthen and broaden our clinical, communications and/or commercial capabilities, add complementary client relationships and bring on board additional management talent. We believe that our track record in identifying, negotiating, closing and integrating strategic, accretive acquisitions has been successful to-date. While the performance of all of our business units has been strong over the past several years, our acquired business operations have contributed to an even greater degree to our revenue growth and profitability.

Business Segments

We have organized our businesses into three complementary operating divisions, which correspond to our operating segments: inVentiv Clinical, inVentiv Communications and inVentiv Commercial. Each of our operating segments is composed of multiple businesses that are referred to as "business units" throughout this report. The following is a detailed description of our three operating segments:

inVentiv Clinical

inVentiv Clinical provides services in the areas of clinical development and clinical trial support. inVentiv Clinical includes the Smith Hanley group of companies (Smith Hanley Associates ("SHA"), Smith Hanley Consulting Group ("SHCG"), MedFocus and Anova Clinical Resources) and HHI Clinical and Statistical Research Services ("HHI"). inVentiv Clinical has also established international execution capabilities through an exclusive joint venture agreement with SIRO Clinpharm Pvt. Ltd. (“SIRO”), India's largest domestic contract research organization. inVentiv Clinical's service offerings include:

·   Clinical Staffing and Recruiting. Through SHCG and MedFocus, we meet staffing and recruiting needs of more than 100 pharmaceutical and biotechnology clients, including 14 of the top 20 global pharmaceutical companies, for SAS™ programmers, data managers, statisticians, monitors and clinical research associates, study and project managers, clinical trials coordinators, safety/regulatory staff, medical writers, scientific and laboratory staff and other clinical personnel. We provide clinical staffing clients with flexibility in managing and executing clinical trials internally and allow them to avoid the expense of hiring and training a full staff. We draw from a database of over 30,000 candidates that is continually expanded through new recruiting techniques that include search engines, job fairs, conferences and referral bonuses.

·   Functional Outsourcing. We provide a variety of functional outsourcing services, including data management and statistical analysis services through HHI, through our dedicated facility in Indianapolis, Indiana and through our joint venture with SIRO, and monitoring and project management services through Synergos. We have performed these services for over 150 clinical trials. Our functional outsourcing services complement SHCG and MedFocus’s contract staffing pool with a statistically-knowledgeable physician and medically-knowledgeable statisticians to deliver well-organized research used in clinical trial and clinical program design, data management, data analysis, double key data entry and validation, reporting and standard operating procedures writing. This bi-disciplinary expertise enables us to set up, manage and present data to help pharmaceutical clients move from the preclinical stage through the drug approval process and post-commercialization oversight.

·   Executive Placement. We provide executive placement services through SHA, which is one of the most experienced and respected executive placement organizations focused primarily on statisticians and data-related functions.

inVentiv Communications

inVentiv Communications provides a full suite of advertising, communications and other functionally related services through the business units comprising inVentiv Communications, Inc., as described below, and offers innovative patient pharmaceutical compliance programs through Adheris.

·   Advertising and Communications Support. Advertising and communications support services are delivered to pharmaceutical industry clients through four separate agencies:

·   GSW Worldwide and Palio are full-service agencies that create marketing solutions through advertising, public relations, market access strategies, media and market research. GSW Worldwide has established international reach through a network of twelve international affiliate relationships.

·   Navicor specializes in oncology and immunology expertise.

·   Stonefly conducts advertising, marketing, and public relations services focused primarily on biotechnology and emerging pharmaceutical companies.

·   Jeffrey Simbrow and Associates (“JSAI”) is a leading healthcare marketing and communications agency in Canada.

·   Patient and physician education. Cadent Medical Communications, Selva Communications and Center for Biomedical Continuing Education ("CBCE") provide education and communications services to build advocacy for pharmaceutical and biotech brands. CBCE is an accredited provider of continuing patient and physician education for physicians.

·   Branding Consultation. Y Brand is a specialized consulting group providing branding solutions for products, product science and technologies, therapeutic franchises and corporations

·   Interactive Communication Development. Blue Diesel is a multi-faceted interactive communications company that strategically blends direct marketing, interactive technology and creative design to provide evidence-based marketing solutions.

·   Consulting and Contract Marketing. Creative Healthcare Solutions, LLC (“CHS”) is a leading provider of contract marketing services for pharmaceutical and biotech companies. CHS supports product teams by adding expertise in brand management, new product planning, market research and business development.

·   Patient Pharmaceutical Compliance Programs. Through Adheris, we provide a variety of patient support services with a proven history of improving medication adherence across nearly every chronic therapeutic category. By partnering with pharmacies around the country, Adheris’ programs build on the pharmacist-patient relationship and trust with personalized letters from pharmacists themselves. Adheris programs comply with the patient privacy provisions of the Health Insurance Portability and Accountability Act of 1996, ("HIPAA"), and its OnSyte(TM) technology allows retail pharmacies to help patients stay on therapy while protecting their confidentiality and private medical information.

inVentiv Commercial

inVentiv Commercial provides a wide range of services in the commercialization area. These service offerings are organized principally along the lines of the business units that make up inVentiv Commercial, which are organized into the following subdivisions within the operating segment:

·   inVentiv Pharma Teams: The inVentiv Pharma Teams group provides outsourced product commercialization programs for prescription pharmaceutical and other life sciences products. inVentiv Commercial maintains and operates systems, facilities, and support services necessary to recruit, train and deploy a customized, full-service, targeted sales force. inVentiv Pharma Teams operates one of the largest pharmaceutical outsourced sales organizations in the United States (“U.S.”).

Life sciences companies, particularly pharmaceutical manufacturers, have traditionally relied upon product detailing as the primary means of influencing prescription writing patterns and promoting their products. Product detailing consists of a one-on-one meeting in a physician's office where a sales representative reviews the medical profile of a product's Food and Drug Administration approved indications. In order to engage in an effective dialogue, the salesperson must be well educated and highly trained. Recruiting qualified personnel and providing client and product specific training are both core competencies of inVentiv Commercial.

To accomplish a coordinated recruiting effort, we maintain a national recruitment office that locates and hires potential sales representatives. Our in-house human resources team adheres to selective hiring criteria and conducts detailed evaluations to ensure high quality of representation for our clients. inVentiv Commercial’s recruiters maintain a fully automated database of qualified candidates for immediate hiring opportunities, and our website home page offers an online application for employment. We offer these recruitment services to clients as part of an integrated sales force recruitment, training and management program, or on a standalone basis. inVentiv Pharma Teams hires a mix of full-time and flex-time representatives in order to accommodate the detailing level required by clients and enhance cost efficiency.

We have one of the largest dedicated training facilities of its type in the U.S. Topics such as sample accountability, negotiation tactics, personal writing skills, integrity selling, time and territory management, team productivity and pharma-manager leadership are covered extensively in order to prepare the representatives for their contact with medical professionals. Our trainers have access to proprietary information about the prescription writing behavior of physicians. We provide this training both for our own and our clients' sales forces, and training and development services are essential to maintaining and building our relationships with the pharmaceutical companies. These strengths are widely recognized as distinguishing inVentiv Commercial from its competitors.

·   inVentiv Pharma Analytics: inVentiv Pharma Analytics consists of our Health Products Research (“HPR”), Total Data Solutions (“TDS”) and MedConference business units.

HPR is a leader in the development and implementation of advanced data analysis and research technologies to support client decision making within pharmaceutical and biotechnology companies. HPR combines leading edge technology with advanced statistical techniques and empirical research to deliver strategic and tactical solutions that help pharmaceutical executives maximize their return on investment for promotional resources. HPR’s range of services includes a variety of quantitative and other tools that supports HPR’s clients in optimizing and continually improving the effectiveness of deployed promotional and sales force resources.

TDS collects and analyzes sales force level data necessary to make marketing resource allocation decisions. Sales representatives are equipped with an industry-leading palm-top and laptop sales force automation system developed for inVentiv Commercial. This system enables our sales representatives to rapidly collect sales call and physician profiling information while in the field, which is compiled daily in a central data storage server. Our information processing system allows sales management teams to analyze data regularly, compare the results with targeted initiatives and historical data and make necessary adjustments to the sales strategy. TDS supports inVentiv Pharma Teams’ needs and also offers this sales force automation system on a standalone basis to clients.

MedConference is a leading provider of live and on-demand virtual event services to the pharmaceutical industry. MedConference’s flagship service, MedConferenceLive™, creates and manages live and on-demand web events for the healthcare industry. MedConference’s turnkey package of reliable technology and full-support services provides a flexible, easy-to-use online communication platform for pharmaceutical companies, medical education providers, professional medical associations and others who need to deliver timely information to physicians and healthcare practitioners.

·   inVentiv Pharma Services: inVentiv Pharma Services consists of our Franklin Group and Lincoln Ltd. (collectively, “Franklin”), Pharmaceutical Resource Solutions (“PRS”) and Promotech Research Associates (“Promotech”) business units:

o   Patient Support Programs: We offer patient assistance programs and reimbursement counseling through our Franklin business unit. Franklin has established a leadership position in providing reliable and innovative patient assistance programs, reimbursement counseling, web-based programs, missions programs and proactive fulfillment. Franklin also provides a variety of additional patient support services to clients, including support in Medicare Part D education.

o   Regulatory Compliance Services: Through our Franklin and PRS business units, we provide independent oversight of Prescription Drug Marketing Act (“PDMA”) and Office of Inspector General compliance to clients and to internal inVentiv Pharma Teams. Our expertise in PDMA compliance issues is nationally recognized. Franklin serves as a liaison for the pharmaceutical industry and consultant to the Food and Drug Administration (“FDA”) and has an ongoing working relationship with the Department of Justice. We provide a number of processes, systems and services to help clients comply with federal and state regulations specific to sample accountability, including auditing of sample accountability compliance by field force professionals and "whole systems" sample accountability assessments. Franklin also licenses software solutions for the implementation of sophisticated PDMA compliance strategies.

o   Non-Personal Promotion: We provide assembly, mailing, fulfillment, pharmacy, teleservices and eServices through our Promotech business unit. Promotech maintains a newly expanded facility with over 62,000 square feet that includes an environmentally controlled, FDA and Drug Enforcement Agency (“DEA”) certified and PDMA compliant warehouse, office space and a 64-station call center.

Acquisitions and Divestitures

 The pursuit of strategic acquisitions is a core part of our business strategy. We believe that our expertise in identifying potential acquisition targets, assessing their importance to our operational and growth objectives, diligencing and completing the acquisition of appropriate businesses and effectively integrating them with our existing operations is a significant competitive advantage. During the first quarter of 2007, we signed definitive agreements to acquire ignite comm.net and Incendia Health, Inc. (collectively, “Ignite”) and Chamberlain Communications Group, Inc. (“Chamberlain”), as highlighted in the table below and further described in Management’s Discussion and Analysis. These acquisitions are expected to close on March 1, 2007. The following is a summary of our acquisitions to date:

Acquisition	Type of Business	Segment (“inVentiv”)	Location	Month Acquired
Ignite Health	Interactive communications agency	Communications	California	Pending
Chamberlain	Public relations	Communications	New York	Pending
MedConference	Virtual event services	Commercial	Pennsylvania	November 2006
DialogCoach	Education and training	Commercial	Pennsylvania	November 2006
JSAI	Marketing and communications agency	Communications	Ontario, Canada	April 2006
Synergos	Clinical trial management services	Clinical	Texas	April 2006
Adheris	Patient pharmaceutical compliance	Communications	Massachusetts	February 2006
inChord	Advertising and communications services	Communications	Ohio	October 2005
PRS	Regulatory compliance	Commercial	Pennsylvania	August 2005
HHI	Data management and statistical analyses	Clinical	Maryland	November 2004
Smith Hanley	Contract staffing and clinical trial support	Clinical	Connecticut	October 2004
Franklin	Patient support programs	Commercial	New Jersey	June 2004

Our acquisition activity adds complexity to the analysis of period-to-period financial results and makes direct comparison of those financial results difficult. Our acquisitions are accounted for using purchase accounting and the financial results of the acquired businesses are included in our consolidated financial statements from their acquisitions dates. A prior year period that ended before an acquisition was completed, however, will not include the corresponding financial results of the acquired business.

 During 2002 and 2003, we divested our European Contract Sales businesses. We have been receiving payments subsequent to some of these divestitures based on the subsequent earnings of the divested unit. For the years ended December 31, 2006, 2005 and 2004, we received approximately $1.4 million, $1.7 million and $2.1 million, respectively, mostly relating to the German and Hungarian-based (2004 only) contract sales organizations.

International Operations

 As part of the acquisition of inVentiv Communications, Inc. in October 2005, we added that company's U.K.-based operations. These operations, based in London, provide advertising, marketing and public relations services to clients throughout Europe. As previously mentioned, in December 2005, we entered into an exclusive joint venture agreement with SIRO Clinpharm Pvt. Ltd., India's largest domestic contract research organization, to offer pharmaceutical companies India-based clinical data management services. This project is in the development stage and has not commenced providing client services. In April 2006, we acquired JSAI, a leading healthcare marketing and communications agency in Canada.

 As a result of the acquisition of inVentiv Communications, Inc., we have a 15% ownership interest in Heart Reklambyra AB (“Heart”), an advertising agency located in Sweden and a 44% interest in Angela Liedler GmbH (“Liedler”), a service provider of communication and marketing tools for technical, medical and pharmaceutical products, located in Germany. Both of these investments are accounted for by using the equity method of accounting.

Clients

 We provide our services to leading pharmaceutical and life sciences companies as well as emerging and specialty biotechnology companies. For the year ended December 31, 2006, no clients individually exceeded 10% of our total revenues and approximately 48% of our revenues were derived from our ten largest clients. Our ten largest clients during 2006, listed alphabetically, were as follows: Allergan, ALTANA Pharma, Boehringer Ingelheim, Inc., Bristol-Myers Squibb Company, Cephalon, Inc., Eli Lilly and Company, Glaxo Smith Kline, Inc., Johnson and Johnson, Novartis Pharmaceuticals, Inc. and Sanofi-Aventis Group. For the year ended December 31, 2005, two clients accounted for approximately 14% and 11%, respectively, of our total revenue.

 We consider our close relationships with leading pharmaceutical manufacturers to be an important competitive advantage, providing us with a source for recurring revenues as well as sales growth opportunities as our clients launch new products and as we develop new offerings. Our services are typically sold to similar target groups within the client organization, typically their clinical or their marketing and sales departments and brand teams. This provides the basis for continuous interaction and feedback, allowing us to continuously improve our services and identify new business opportunities, a process augmented by the longevity of many of our client relationships. We have developed sustained relationships with large, mid-tier and emerging pharmaceutical and biotechnology clients that provide us with recurring revenue streams and cross-selling opportunities. Our ability to perform services and add value at every part of the product life cycle enhances our ability to develop new business opportunities and form long-lasting relationships with clients.

 Our relationships with a client's clinical or marketing and sales organizations also benefit from high switching costs, as retaining another sales force or advertising agency and redesigning a marketing program creates substantial additional expense and causes losses in time and productivity for our clients. In addition, successful marketing and sales outsourcers have established their reputations due to sophisticated performance evaluation capabilities, and clients are unlikely to use vendors without widely recognized expertise.

Competition

 We operate in highly competitive industries. Our competitors include a variety of vendors providing services to the pharmaceutical and life sciences industry, including outsourced sales organizations, medical communications agencies and contract research organizations. Each of our business segments faces distinct competitors in the individual markets in which each operates:

·   inVentiv Clinical: The specialty staffing services industry is very competitive and fragmented with relatively few barriers to entry. We compete with several large nationwide temporary staffing companies. Our primary clinical staffing competitors include ClinForce (a division of Cross Country), Managed Clinical Solutions (a division of ICON), ASG, Advanced Clinical Services and Kforce. Primary competitors in the permanent placement area include Korn Ferry, Reynolds and Reynolds, Heidrick and Struggles as well as numerous smaller specialty permanent placement groups which compete with us; however we are one of the only national firms that specializes exclusively in professional clinical trials research personnel.

·   inVentiv Communications: Marketing and communications services is a relatively fragmented and competitive market. Our Communications Services group competes with the healthcare offerings of the five large global advertising holding companies, which include WPP, Omnicom, Publicis, IPG and Havas. In addition, we compete with a large number of smaller specialized agencies that have focused either on a therapeutic area or a particular service offering.

·   inVentiv Commercial: The majority of sales teams are managed internally by our clients, and we compete with our clients' alternative choices of managing their needs internally or partnering with another pharmaceutical company. In addition, a small number of providers comprise the market for outsourced sales teams, and we believe that inVentiv, Innovex (Quintiles), Professional Detailing, Inc. and Publicis combined account for the majority of the U.S. outsourced sales team market share. The rest of the industry is fragmented, with a number of small providers attempting to develop niche services. One or more of our large competitors in the outsourced sales team market could become significant competitors with regard to the other services we offer by either developing additional capabilities or acquiring smaller companies.

We believe that our business units individually and our organization as a whole have a variety of competitive advantages that have allowed us to compete successfully in the marketplaces for our services. These advantages include the following:

·   Leading Position Within Service Categories: We believe that our operating divisions, and the business units within each operating division, have achieved positions of leadership within their service areas. Our inVentiv Communications division is a major force in advertising and communications, and prior to our acquisition of that company, was the largest privately-held healthcare marketing organization in the world. inVentiv Clinical is recognized as a leader in clinical trials staffing and a leading provider of clinical trials-related SAS programmers, statisticians, data management and monitoring personnel to the major pharmaceutical and biotechnology companies. inVentiv Pharma Teams provides product detailing services to a large number of physicians, nurses, pharmacists and formularies. Our business units have extensive experience and proven track records that support our sales efforts.

·   Comprehensive Service Offering: We are one of the largest providers of services to the pharmaceutical industry in the U.S. and offer a broad range of services. These are important factors to our clients and potential clients, many of whom prefer to work with organizations that can provide a comprehensive suite of complementary services and have a proven track record.

·   Broad and Diversified Client Base: In addition to serving many of the largest pharmaceutical companies, we also serve a large number of mid-size and smaller biotechnology and life sciences companies. As each of these companies uses our services, our relationship is expanded and the opportunity to cross-sell products increases. Our client base of over 200 pharmaceutical and biotechnology clients is broad and diversified, and with many of these clients we have maintained long-term relationships that help us in continuing to win new business.

·   Proprietary Technologies and Data: We maintain and operate a number of proprietary software programs and systems for marketing development and data gathering. We invest in technology and have developed and deployed cutting-edge marketing and sales force automation tools. Our technical advantages in the sales force automation area are important for the management of sales and marketing campaigns for pharmaceutical products throughout their life cycle, particularly during the product launch phase. Our patient compliance offerings rely on a broad network of retail pharmacies and our use of proprietary technologies to effectively manage the underlying data in a timely and targeted manner.

·   Experienced Management Team: Our management team includes executives with substantial expertise in pharmaceutical and healthcare services, as well as substantial background within pharmaceutical companies themselves, including managing pharmaceutical sales forces, establishing sales and marketing strategies, and product management industry experience. The team also has extensive experience in the areas of outsourced staffing, permanent placement and executive search services. We believe our mix of senior management with pharmaceutical services experience, entrepreneurial talent and strategic perspective is unique in the industry.

Seasonality

 Although our business is subject to variability as a result of the ongoing startup and completion of contracts, periodic receipt of incentive fees and the ramp up of product revenues in certain contracts, and select businesses do have some degree of seasonality, our business in aggregate is not generally subject to seasonal variation.

Employees

 At December 31, 2006, we employed approximately 5,200 people in our operations. Many aspects of our business are very labor intensive and the turnover rate of employees in our industry, and in corresponding segments of the pharmaceutical industry, is generally high, particularly with respect to sales force employees. We believe our turnover rate is comparable to that of other outsourced service organizations and internal pharmaceutical sales and marketing departments. We believe that our relations with our employees are satisfactory.

Government Regulation

 Our pharmaceutical and life sciences clients are subject to extensive government regulation. Generally, compliance with these regulations is the responsibility of those clients. However, several of our businesses are themselves subject to the direct effect of government regulation. In addition, we may be liable under certain of our customer contracts for the violation of government regulations by the applicable customers to the extent those violations result from or relate to the services we have performed for such customers. We could be subject to a variety of enforcement or private actions for our failure or the failure of our clients to comply with such regulations.

 Our inVentiv Communications segment is subject to all of the risks, including regulatory risks, that advertising companies generally experience as well as risks that relate specifically to the provision of advertising services to the pharmaceutical industry. There has been an increasing tendency in the U.S. on the part of advertisers to resort to the courts and industry and self-regulatory bodies to challenge comparative advertising on the grounds that the advertising is false and deceptive. Through the years, there has been a continuing expansion of specific rules, prohibitions, media restrictions, labeling disclosures and warning requirements with respect to the advertising for certain products.

 Adheris, which, through our inVentiv Communications segment, provides persistence and compliance programs, principally in the form of refill reminder communications, to pharmacy chains. These activities are subject to regulation under HIPAA, the Federal Health Care Programs Antikickback Law and corresponding state laws. We believe that Adheris's activities comply with all applicable federal and state laws in all material respects. Certain of these laws are subject to interpretation that is evolving. We could incur significant expenses if Adheris's activities are determined to be non-compliant and, depending the extent and scope of any such regulatory developments, our consolidated financial condition and results of operations could be materially and adversely affected.

 Our inVentiv Commercial segment provides contract sales services to the pharmaceutical industry and employs sales representatives who handle and distribute samples of pharmaceutical products. The handling and distribution of prescription drug products are subject to regulation under the Prescription Drug Marketing Act of 1987 and other applicable federal, state and local laws and regulations. These laws and regulations regulate the distribution of drug samples by mandating storage, handling, solicitation and record-keeping requirements for drug samples and by banning the purchase or sale of drug samples.

 Some of our physician education services in our inVentiv Commercial segment are subject to a variety of federal and state regulations relating to both the education of medical professionals and the marketing and sale of pharmaceuticals. In addition, certain ethical guidelines promulgated by the American Medical Association ("AMA") govern the receipt by physicians of gifts in connection with the marketing of healthcare products. These guidelines govern the honoraria and other items of value that AMA physicians may receive, directly or indirectly, from pharmaceutical companies. Any changes in such regulations or their application could have a material adverse effect on inVentiv. Failure to comply with these requirements could result in the imposition of fines, loss of licenses and other penalties and could have a material adverse effect on our consolidated financial condition and results of operations .

 From time to time, state and federal legislation is proposed with regard to the use of proprietary databases of consumer and health groups. The uncertainty of the regulatory environment is increased by the fact that we generate and receive data from many sources. As a result, there are many ways government might attempt to regulate our use of this data. Any such restriction could have a material adverse effect on our consolidated financial condition and results of operations.

Available Information

 We make available on our website, located at www.inventivhealth.com, the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the United States Securities and Exchange Commission (“SEC”): our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. All such filings are available free of charge. Information found on our website should not be considered part of this annual report on Form 10-K.

Item 1A. Risk Factors

Risks Related to Our Business

 We are a complex organization encompassing three segments, each with its own particular risks and uncertainties. A wide range of factors could materially affect our financial results and the performance of our stock price. The factors affecting our operations include the following:

Our revenues are dependent on expenditures by companies in the pharmaceutical and life sciences industries, and a variety of factors could cause the overall levels of those expenditures to decline.

 Our revenues are highly dependent on expenditures by companies in the pharmaceutical industry (and, to a lesser extent, other life sciences industries) for advertising, promotional, marketing and sales, recruiting, clinical staffing and support and compliance services. Any decline in aggregate demand for these services could negatively affect our business.

·   Advertising, promotional, marketing and sales expenditures by pharmaceutical manufacturers have in the past been, and could in the future be, negatively impacted by, among other things, governmental reform or private market initiatives intended to reduce the cost of pharmaceutical products or by governmental, medical association or pharmaceutical industry initiatives designed to regulate the manner in which pharmaceutical manufacturers promote their products.

·   Consolidation in the pharmaceutical industry could negatively affect certain of our business units by reducing overall outsourced expenditures, particularly in the sales, marketing and staffing areas.

·   Companies may elect to perform advertising, promotional, marketing, sales, compliance and other services internally based on industry and company-specific factors such as the rate of new product development and FDA approval of those products, number of sales representatives employed internally in relation to demand for or the need to promote new and existing products and competition from other suppliers.

·   Companies may elect to perform clinical tasks internally based on industry and company-specific factors such as the rate of new product development and FDA approval of those products, the number of clinical professionals employed internally in relation to the demand for or the need to develop new drug candidates, and competition from other suppliers.

Many of the contracts under which we provide services are subject to termination on short notice, which may make our revenues less predictable.

 We provide services to many of our most significant clients under contracts that our clients may cancel on short notice (generally 10 to 120 days, depending on the specific business unit). In addition, many of our pharmaceutical sales contracts provide our clients with the opportunity to internalize the sales forces under contract. Although we have been successful in a number of cases in negotiating longer-term commitments and a non-cancelable initial period for pharmaceutical sales contracts, we cannot be assured that clients will renew relationships beyond the expiration date of existing contracts in any of our business units. We cannot assure you that our most significant clients will continue to do business with us over the long term. If any of our significant clients elect to cancel, convert or not renew their contracts, it could have a material adverse effect on our consolidated financial condition and results of operations.

We are in the process of integrating a significant number of acquisitions and expect to make future acquisitions, which will involve additional risks

 For the past several years, a significant component of our growth strategy has been the addition through acquisitions of business units that are accretive to earnings. We have and will continue to seek to address the need to offer additional services through acquisitions of other companies, including the personnel such acquisitions may bring to us. The current market for acquisition targets in our industry is competitive, and we may not be successful in continuing to identify, successfully bid for and complete acquisitions necessary to achieve our operational and financial goals.

 Our acquisitions of Adheris, JSAI, Synergos, MedConference and DialogCoach were completed during 2006 (MedConference and DialogCoach during the fourth quarter of 2006). Operational and financial integration of the acquired businesses is not yet complete and we may experience difficulties in completing the integration processes. Among other things, we are generally required to document internal controls under Section 404 of the Sarbanes-Oxley Act for each of our acquired business units by the end of the first fiscal year following the year in which the acquisition occurs. We may not be successful in recognizing material weaknesses in internal controls over financial reporting for our acquired businesses and may have difficulty remedying any such material weaknesses on a timely basis. More generally, we may experience difficulties in the integration of personnel and technologies across diverse business platforms.

 Acquisitions involve numerous risks in addition to integration risk, including the following:

·   diversion of management’s attention from normal daily operations of the business;

·   insufficient revenues to offset increased expenses associated with acquisitions; and

·   the potential loss of key customers or employees of the acquired companies.

 Acquisitions, and related acquisition earnouts, may also cause us to deplete our cash reserves and/or increase our leverage, and therefore increase the financial risk of our capital structure; assume liabilities of the acquired businesses; record goodwill and non-amortizable intangible assets that will be subject to impairment testing and potential periodic impairment charges; incur amortization expenses related to certain intangible assets; or become subject to litigation.

 Mergers and acquisitions of new businesses are inherently risky, and no assurance can be given that our previous or future acquisitions will be successful and will not materially and adversely affect our business, operating results, or financial condition. Failure to manage and successfully integrate acquisitions we make could harm our operational and consolidated financial condition and results of operations in a material way.

We may not be successful in managing our infrastructure and resources to support continued growth.

 Our ability to grow also depends to a significant degree on our ability to successfully leverage our existing infrastructure to perform services for our clients, develop and successfully implement new sales channels for the services we offer and to enhance and expand the range of services that we can deliver to our customers. We have historically maintained a relatively flat management structure; as the sizes of our business units grow and the number of our acquired business units increases, the breadth and depth of the responsibilities of our senior management team has increased as well. Our growth will also depend on a number of other factors, including our ability to:

·   maintain the high quality of the services we provide to our customers;

·   increase our penetration with existing customers;

·   recruit, motivate and retain qualified personnel;

·   economically train existing sales representatives and recruit new sales representatives; and

·   implement operational and financial systems and additional management resources to operate efficiently and effectively regardless of market conditions.

 We cannot assure you that we will be able to manage or expand our operations effectively to address current or future demand and market conditions, or that we will be able to do so without incurring increased costs in order to maintain appropriate infrastructure and senior management capabilities. If we are unable to manage our infrastructure and resources effectively, our business, consolidated financial condition and results of operations could be materially and adversely affected.

We employ sophisticated computer technology to deliver our services, and any failure of or damage to this technology could impair our ability to conduct our business.

 We have invested significantly in sophisticated and specialized computer technology and have focused on the application of this technology to provide customized solutions to meet many of our clients' needs. We have also invested significantly in sophisticated end-user databases and software that enable us to market our clients' products to targeted markets. We anticipate that it will be necessary to continue to select, invest in and develop new and enhanced technology and end-user databases on a timely basis in the future in order to maintain our competitiveness. In addition, our business is dependent on our computer equipment and software systems, and the temporary or permanent loss of this equipment or systems, through casualty or operating malfunction, could have a material adverse effect on our consolidated financial condition and results of operations Our property and business interruption insurance may not adequately compensate us for all losses that we may incur in any such event.

We are subject to a high degree of government regulation.

 We are subject to a high degree of government regulation. Significant changes in these regulations, or our failure to comply with them, could impose additional costs on us or otherwise negatively affect our operations. See the discussion under "Business - Government Regulation" above.

Our services are subject to evolving industry standards and rapid technological changes.

 The markets for our services are characterized by rapidly changing technology, evolving industry standards and frequent introduction of new and enhanced services. To succeed, we must continue to enhance our existing services; introduce new services on a timely and cost-effective basis to meet evolving customer requirements; integrate new services with existing services; achieve market acceptance for new services; and respond to emerging industry standards and other technological changes.

We may be adversely affected by customer concentration.

 We have no customers, individually, that accounted for in excess of 10% of our revenues for the year ended December 31, 2006, and our largest customer during such year accounted for 8% of revenues. If any large customer decreases or terminates its relationship with us, our business and consolidated financial position and results of operations could be materially adversely affected.

Substantial defaults by our customers on our accounts receivable could have a significant negative impact on our business, results of operations, financial condition or liquidity.

 A significant portion of our working capital consists of accounts receivable from customers. If customers responsible for a significant amount of accounts receivable were to become insolvent or otherwise unable to pay for products and services, or were to become unwilling or unable to make payments in a timely manner, our business, consolidated results of operations, consolidated financial position or liquidity could be materially and adversely affected. In the event of an economic or industry downturn, such downturn could have an adverse affect on the servicing of these accounts receivable, which could result in longer payment cycles, increased collection costs and defaults in excess of management’s expectations.

We may lose or fail to attract and retain key employees and management personnel.

 Our key managerial and other employees are among our most important assets. An important aspect of our competitiveness is our ability to attract and retain key employees and management personnel. Compensation for these key employees and management personnel is an essential factor in attracting and retaining them, and there can be no assurance that we will offer a level of compensation sufficient to do so. Equity-based compensation, including compensation in the form of options and restricted stock, plays an important role in our compensation of new and existing employees. Because of limitations on the number of shares available for future grant under our equity incentive plan, we may be unable to meet the compensation requirements of our key employees and management personnel. In addition, as a result of our adoption of SFAS 123R effective January 1, 2006, equity-based compensation is reflected in our income statement and has a negative impact on earnings.

We may incur liability in connection with litigation.

 We are subject to lawsuits, investigations and claims arising out of the conduct of our business, including those related to commercial transactions, contracts, government regulation and employment matters. Certain claims, suits and complaints have been filed or are pending against us. We do not believe that any claims that are currently pending will have a material adverse effect on our consolidated financial position and results of operations. Litigation is inherently uncertain, however, and we cannot assure you that we will not suffer such an effect as a consequence of any pending or future claims.

We may not be able to comply with the requirements of our credit facility.

 In connection with our acquisition of of inVentiv Communications, Inc., we entered into a syndicated credit facility with UBS AG, Stamford Branch and others. The current outstanding balance under this facility was approximately $164.6 million as of December 31, 2006, which is attributable to a $175 million term loan component. The term loan will mature on the sixth anniversary of the credit facility, with scheduled quarterly amortization of 1% per year during years one through five and 95% during year six. The revolving loans will mature on the sixth anniversary of the credit facility. Amounts advanced under the credit facility must be prepaid with a portion of our "Excess Cash Flow", as defined in the credit agreement. The credit facility contains numerous operating covenants that have the effect of reducing management's discretion in operating our businesses, including covenants limiting:

·   the incurrence of indebtedness;

·   the creation of liens on our assets;

·   sale-leaseback transactions;

·   acquisitions;

·   guarantees;

·   payment of dividends; and

·   fundamental changes and transactions with affiliates.

 The credit facility also requires that we meet certain ongoing performance tests relating to leverage, interest rate coverage and fixed charge coverage ratios that vary based on the amount of time elapsed since the initial extension of credit. If we are unable to comply with the requirements of the credit facility, our lenders could refuse to advance additional funds to us and/or seek to enforce remedies against us. Any such developments would have a material adverse effect on inVentiv. As of the date of this report, we comply with the requirements of our credit facility.

Our future financial results may not be consistent with our guidance.

 From time to time, we communicate to the market guidance relating to our revenue, earnings per share and other financial measures. These statements are intended to provide metrics against which to evaluate our performance, but they should not be understood as predictions or assurances of our future performance. Our ability to meet any projected financial result milestone is subject to inherent risks and uncertainties, and we caution investors against placing undue reliance on our published guidance. See "Cautionary Statement Regarding Forward-Looking Disclosure" above.

Risks Related to our Common Stock

The trading price of our common stock may be volatile, and you may not be able to sell your shares at or above the price at which you acquire them.

 The trading price of our common stock may fluctuate significantly. Factors affecting the trading price of our common stock include:

·   variations in operating results;

·   the gain or loss of significant customers or suppliers;

·   announcements relating to our acquisition of other businesses;

·   changes in the estimates of our operating results or changes in recommendations by any securities analysts that elect to follow our common stock; and

·   market conditions in our industry, the industries of our customers and our suppliers and the economy as a whole.

In addition, if the market for health care stocks or the stock market in general experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, consolidated operating results or consolidated financial condition.

Anti-takeover provisions in our organizational documents make any change in control more difficult.

 Our certificate of incorporation and by-laws contain provisions that may delay or prevent a change in control, may discourage bids at a premium over the market price of our common stock and may affect adversely the market price of our common stock and the voting and other rights of the holders of our common stock. These provisions include:

·   limitations on the ability of our shareholders to call a special meeting of shareholders;

·   our ability to issue additional shares of our common stock without shareholder approval;

·   our ability to issue preferred stock with voting or conversion rights that adversely affect the voting or other rights of holders of common stock without their approval;

·   provisions that provide that vacancies on the board of directors, including any vacancy resulting from an expansion of the board, may be filled by a vote of the directors in office at the time of the vacancy; and

·   advance notice requirements for raising matters of business or making nominations at shareholders’ meetings.

Our acquisition activity may dilute your equity interest and negatively affect the trading price of our common stock.

 We have historically chosen to satisfy a significant portion of the consideration paid for acquired businesses in the form of shares of our common stock, including by reserving the right to satisfy a portion of any contingent, or "earnout", consideration, by issuing additional shares of our common stock. The potential earnout obligations under the terms of our completed acquisitions may be material individually or in the aggregate. Acquisitions we make in the future, and any earnout consideration from completed acquisitions that we satisfy through the issuance of our common stock, may significantly dilute your equity interest and may negatively affect the trading price of our common stock.

A substantial number of our securities are eligible for future sale and this could affect the market price for our stock.

 The market price of our common stock could drop due to sales of a large number of shares of our common stock or the perception that these sales could occur. As of February 22, 2007, we had 30,135,993 shares of common stock outstanding. Of these shares, a total of 534,471 shares were subject to resale restrictions and will become eligible for sale pursuant to Rule 144 over the next several years or earlier if inVentiv elects to register those shares for resale on a voluntary basis. Shares issued in future acquisitions, and shares issued in satisfaction of earnout obligations under completed acquisitions, may add substantially to the number of shares available for future sale.

 In addition, as of February 22, 2007, approximately 2,192,521 shares of our common stock were subject to outstanding stock options. Holders of our stock options are likely to exercise them, if ever, at a time when we otherwise could obtain a price for the sale of our securities that is higher than the exercise price per security of the options or warrants. This exercise, or the possibility of this exercise, may reduce the price of our common stock.

Item 1B. Unresolved Staff Comments

 We have received no written comments regarding its periodic or current reports from the staff of the Securities and Exchange Commission that were issued 180 days or more preceding the end of its 2006 fiscal year and that remain unresolved.

Item 2. Properties.

 As of December 31, 2006, we leased 36 facilities totaling 681,379 square feet, including our principal executive offices located in Somerset, New Jersey. Ten facilities totaling 63,083 square feet are leased by the inVentiv Clinical segment, 14 facilities totaling 285,445 square feet are leased by the inVentiv Communications segment, 10 facilities totaling 274,688 square feet are leased by the inVentiv Commercial segment, and two facilities with approximately 58,163 square feet is leased by the Other (corporate) segment. These leases expire at varying dates through 2017. We believe that our facilities are adequate for our present and reasonably anticipated business requirements.

Item 3. Legal Proceedings.

 We are subject to lawsuits, investigations and claims arising out of the conduct of our business, including those related to commercial transactions, contracts, government regulation and employment matters. Certain claims, suits and complaints have been filed or are pending against us. All such matters are of a kind routinely experienced in our business and are consistent with our historical experience. We do not believe that any action will have a material adverse effect on our consolidated balance sheets, results of operations or cash flows.  The following action is pending against our Adheris business unit:

Utility Consumer Action Network v. Albertson’s Inc.(Case No. GIC 830069). This action was filed on May 17, 2004 in California Superior Court against Albertson’s Inc. three other drug store chains and 17 pharmaceutical companies alleging, among other things, violations of the California Unfair Competition Law and the California Confidentiality of Medical Information Act arising from the operation of manufacturer-sponsored, pharmacy-based compliance programs similar to Adheris's programs. The plaintiff is seeking "equitable monetary relief", disgorgement, statutory damages and penalties, injunctive relief and reimbursement of attorneys' fees in this lawsuit. An amended complaint was filed on November 4, 2004 naming Adheris as an additional defendant. Three demurrers are in the briefing stage and are expected to be ruled on shortly. Our insurer is defending this action under reservation of rights. We do not believe that this action will have a material adverse effect on our consolidated balance sheets, results of operations or cash flows.

Item 4. Submission of Matters to a Vote of Securities Holders.

 No matters were submitted to a vote of security holders during the fourth quarter of the year ended December 31, 2006.

PART II

Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities.

 The following table contains the high and low sales prices of our common stock traded on the Nasdaq Global Select (ticker symbol “VTIV”) during the periods indicated:

		High		Low
Year ended December 31, 2006
First Quarter	$	33.22	$	23.91
Second Quarter	$	32.67	$	26.77
Third Quarter	$	32.70	$	26.99
Fourth Quarter	$	35.35	$	27.19
		High		Low
Year ended December 31, 2005
First Quarter	$	26.17	$	19.47
Second Quarter	$	24.60	$	17.22
Third Quarter	$	27.23	$	19.00
Fourth Quarter	$	27.65	$	23.20

 On February 22, 2007, there were approximately 186 record holders of our common stock.

 To date, we have not declared cash dividends on our common stock and are currently restricted from doing so under our credit agreement. We do not anticipate paying any cash dividends in the foreseeable future.

 The following table summarizes securities authorized for issuance under our equity compensation plans as of December 31, 2006:

	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plans approved by security holders
2006 Stock Incentive Plan	2,194,116	$14.43	2,476,714	*
Equity compensation plans not approved by security holders	-	-	-
Total	2,194,116		2,476,714
* The 2006 Long-Term Incentive Plan authorizes the issuance of stock options, restricted stock, restricted stock units, stock appreciation rights and performance awards.

 During the fourth quarter of 2006, we did not repurchase any of our outstanding equity securities and, to our knowledge, no “affiliated purchaser” of inVentiv repurchased any of our outstanding securities.

 The transfer agent for our common stock is American Stock Transfer and Trust Company, 6201 Fifteenth Avenue, Brooklyn, New York, 11219.

 The information required by Item 201(e) of Regulation S-K will be contained in, and is incorporated by reference from, the annual report to security holders for our fiscal year ended December 31, 2006.  Such information shall not be deemed to be “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934.

Item 6. Selected Financial Data.

SELECTED FINANCIAL DATA

 The following table summarizes certain of our historical financial data and is qualified in its entirety by reference to, and should be read in conjunction with, our historical consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. Historical financial information may not be indicative of our future performance. See also "Item 7--Management's Discussion and Analysis of Financial Condition and Results of Operations".

	For the Years Ended December 31,
		2006		2005		2004		2003			2002
	(in thousands, except per share data)
Revenues	$	766,245	$	556,312	$	352,184	$	224,453		$	215,387
Income from continuing operations	$	49,198	$	43,082	$	30,130	$	9,895		$	4,941
Income (losses) from discontinued operations	$	2,037	$	781	$	1,002	$	(4,119	)	$	2,951
Net income	$	51,235	$	43,863	$	31,132	$	5,776		$	7,892
Basic earnings (losses) per share:
Continuing operations	$	1.69	$	1.60	$	1.26	$	0.43		$	0.22
Discontinued operations	$	0.07	$	0.03	$	0.04	$	(0.18	)	$	0.13
Basic earnings per share	$	1.76	$	1.63	$	1.30	$	0.25		$	0.35
Diluted earnings (losses) per share:
Continuing operations	$	1.64	$	1.53	$	1.18	$	0.42		$	0.22
Discontinued operations	$	0.06	$	0.03	$	0.04	$	(0.18	)	$	0.13
Diluted earnings per share	$	1.70	$	1.56	$	1.22	$	0.24		$	0.35
Shares used in computing basic earnings (losses) per share		29,159		26,875		23,951		22,919			22,842
Shares used in computing diluted earnings (losses) per share		30,058		28,165		25,437		23,801			22,857
Balance sheet data:
Total assets	$	771,054	$	583,894	$	287,452	$	180,708		$	153,418
Long-term debt (a)	$	184,717	$	190,508	$	24,898	$	18,488		$	8,904
Total equity	$	358,462	$	253,219	$	172,444	$	107,725		$	96,446

(a) Long-term debt includes the non-current portion of our credit arrangement (for 2005 and 2006) and capital lease obligations (for all years), but excludes the current portion of our credit agreement and capital lease obligations.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

 This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the consolidated financial statements, accompanying notes and other financial information included in this Annual Report on Form 10-K for the years ended December 31, 2006, 2005 and 2004.

Introduction

 We currently manage three operating segments: inVentiv Clinical, inVentiv Communications and inVentiv Commercial, and its non-operating reportable segment, “Other”, which is based on the way management makes operating decisions and assesses performance. The following represents our reportable segments:

·   inVentiv Clinical, which provides services related to permanent placement, clinical staffing, data collection and management and functional outsourcing.

·   inVentiv Communications, which provides services related to pharmaceutical advertising, branding, interactive communication development and patient and physician education.

·   inVentiv Commercial, which consists of our outsourced sales and marketing teams, planning and analytics services, sample accountability and patient assistance businesses, marketing support services, professional development and training, and recruitment of sales representatives in the commercial services area.

Our business is heavily dependent on the willingness and propensity of our customers to seek outsourced solutions for the services we provide. We believe that our business has been positively affected by a trend of large pharmaceutical manufacturers toward utilizing outsourcing arrangements as a means of controlling variable unit cost and increasing flexibility. Although large contracts with these manufacturers remain an important component of our overall business activity, there is a potential for margin contraction and the termination of contracts resulting from downsizing and other cost control measures by large pharmaceutical manufacturers.

We believe that the increasing percentage of New Drug Application (“NDA”) and New Molecular Entity (“NME”) approvals attributable to small and mid-tier pharmaceutical and biotechnology companies presents an opportunity for companies providing outsourced services because these companies often prefer to employ high-quality, third party service providers (either directly or in co-promotion situations with pharmaceutical partners) to effect critical late-stage developmental and commercialization functions, rather than building significant infrastructure internally. We therefore target a broad spectrum of companies within the pharmaceutical and life sciences industry in seeking to develop business opportunities.

Critical Accounting Policies

Revenue Recognition

The following is a summary of our revenue recognition policy, based on the segment and services we provide:

inVentiv Clinical

·   Clinical Staffing and Recruiting- Revenues are recognized and recorded when services are rendered.

·   Functional Outsourcing- Revenues are recognized and recorded when milestones are achieved, in accordance with the terms of the contracts.

·   Executive Placement- Revenues are recognized and recorded at the time a candidate begins full-time employment. Any write-offs due to cancellations and/or billing adjustments historically have been insignificant.

inVentiv Communications

·   Advertising and Communication support- Revenues are recognized and recorded under the proportional performance method, by relating the actual hours of work performed to date to the current estimated total hours of the respective projects. Any anticipated losses on projects are recognized when such losses are anticipated. Time and production billings are billed as incurred for actual time and expenses.

·   Branding Consultation- Revenues are recognized and recorded on a fee for service basis, in accordance with the terms of the contracts.

·   Patient and Physician Education- Revenues are recognized and recorded using either the completed contract method or when milestones are achieved, depending on the terms of the specific contracts.

·   Interactive Communication Development- Revenues are recognized and recorded as time and production billings are billed as incurred for actual time and expenses.

inVentiv Commercial

·   Sales and Marketing Teams- Revenues and associated costs are recognized and recorded under pharmaceutical detailing contracts based on the number of physician calls made or the number of sales representatives utilized. Most of our Sales and Marketing Teams’ contracts involve two phases, a “deployment phase”, typically three months, in which we perform initial recruiting, training and preparation for deployment of the field force at the start of a new contract, and the “Promotion phase” in which our deployed field force actively promotes specified products for clients through face-to-face interactions with physicians referred to as “detailing”.

Our inVentiv Pharma Teams contracts specify a separate fee for the initial “deployment phase” of a project. We consider the deployment phase to be a separate and distinct earnings process and recognize the related revenues throughout the deployment phase, which typically spans a period of two to three months at the beginning of the first year of a contract. We generally recognize revenue during the “promotion phase” of our inVentiv Pharma Teams contracts on a straight-line basis based on the size of the deployed field force. The accounting for the two phases is based on our analysis of Emerging Issues Task Force (“EITF”) Issue No. 00-21, Revenue Arrangements with Multiple Deliverables, in which we have concluded that the deployment and promotion phases are being sold separately and therefore qualify as separate units of accounting within the meaning of paragraph 9 of EITF 00-21.

Many of the product detailing contracts allow for additional periodic incentive fees to be earned once agreed-upon performance benchmarks have been attained. Revenue from incentive fees is recognized and recorded when we are reasonably assured that payment will be made, and is typically based upon verification through calculation of achievement, third party data or client verification. Many contracts also stipulate penalties if agreed upon performance benchmarks have not been met. These penalties are recognized upon verification of performance shortfalls.

Non-refundable conversion fees are recognized and recorded as revenue when one of our sales professionals accepts a firm offer of permanent employment from a customer during the term of a contract.

·   Planning and Analytics- Revenues for HPR generally include fixed fees, which are recognized and recorded when monthly services are performed based on the proportional performance method and when payment is reasonably assured. HPR’s initial contracts typically range from one month to one year. Revenues for additional services are recognized and recorded when the services are provided and payment is reasonably assured.

·   Regulatory Compliance and Patient Assistance- Regulatory compliance revenues for both fixed fees services and fees for specific compliance related services are recognized and recorded when monthly services are performed. Patient assistance programs revenues depend on the number of patients served and are recognized and recorded as each service is performed.

·   Marketing Support Services- Revenues are recognized and recorded based on time incurred and fulfillment requirements in accordance with the terms of the contracts .

·   Professional Development and Training- Revenues are generally recognized and recorded as training courses are completed.

General Revenue Recognition

Reimbursable Costs

Reimbursable costs, including those relating to travel and out-of pocket expenses, sales force bonuses tied to individual or product revenues, and other similar costs, are generally included in revenues, and an equivalent amount of reimbursable expenses is included in costs of services in the period in which such amounts have been finalized. In certain cases, based on our analysis of EITF Issue No. 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent, and related accounting literature, we may also record certain reimbursable transactions, such as the placement of media advertisements where we act as an agent, as net revenues.

Loss Contracts

We periodically analyze our contracts to determine the likelihood and amount of any potential loss on a contract resulting from lower than anticipated product, field force or other performance. In the event that current information illustrates a loss is likely to be incurred over the remaining life of the contract, we accrue that loss at the time it becomes probable. We did not have any material loss contracts in 2006, 2005 or 2004.

Billing

Customers are invoiced according to agreed upon billing terms. Contracts that are invoiced prior to performance of related services are recorded as client advances and unearned revenue and are not recognized as revenues until earned, in accordance with our revenue recognition policies. Amounts earned for revenues recognized before the agreed upon billing terms have been met are recorded as revenue and included in unbilled services. Upon billing, these amounts are transferred to billed accounts receivable.

 Goodwill and Other Intangible Assets

 Goodwill and other indefinite-life intangibles are assessed for potential impairment pursuant to the guidelines of Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets,on an annual basis (at June 30) or when management determines that the carrying value of goodwill or an indefinite-lived intangible asset may not be recoverable based upon the existence of certain indicators of impairment. Goodwill is tested for impairment at least annually using a two-step process that begins with an estimation of the fair value of a reporting unit. The first step is a screen for potential impairment, and the second step measures the amount of impairment, if any. We calculate and compare the fair value of the goodwill and indefinite-lived intangible asset to its carrying value. If the carrying value exceeds the fair value, an impairment loss will be recognized in an amount equal to the difference. If we deem the useful life to be no longer indefinite after testing for impairment in accordance with the applicable rules stated above, we amortize the intangible asset over its remaining estimated useful life, following the pattern in which the expected benefits will be consumed or otherwise used up and we continue to review for impairment on an annual basis.

 We performed annual impairment tests as of June 30, 2006 and concluded that the existing goodwill and indefinite-lived intangible tradename balances were not impaired and continue to maintain this position as of December 31, 2006, based on various factors, including updated forecasts and the current condition of the Company. As of December 31, 2006, we had goodwill of approximately $266.8 million and other intangibles (net) of $152.6 million in the Consolidated Balance Sheet.

Stock-based Compensation

 Statement of Financial Accounting Standards No. 123R “Share Based Payments” (“ SFAS 123R”),establishes accounting for share-based awards exchanged for employee services and requires companies to expense the estimated fair value of these awards over the requisite employee service period. On April 14, 2005, the U.S. Securities and Exchange Commission adopted a new rule amending the effective dates for SFAS 123R. In accordance with the new rule, we adopted the accounting provisions of SFAS 123R as of January 1, 2006.

 We adopted SFAS 123R using the modified prospective transition method beginning January 1, 2006. Accordingly, during the year ended December 31, 2006, we recorded stock-based compensation expense for awards granted prior to, but not yet vested, as of January 1, 2006, as if the fair value method required for pro forma disclosure under FAS 123 were in effect for expense recognition purposes, adjusted for estimated forfeitures. For stock-based awards granted after January 1, 2006, we recognized compensation expense based on the estimated grant date fair value method using the Black-Scholes valuation model. For these awards, compensation expense was recognized using a ratable amortization method.

 With the adoption of SFAS 123R in 2006, we have limited our issuance of stock options to senior executives, while granting restricted shares to employees at various levels. During the fourth quarter of 2005, prior to the adoption of SFAS 123R, management analyzed its expected volatility and expected life of stock options and concluded that the expected volatility for options granted during the fourth quarter of 2005 should be 45% and the expected life of the options granted should range between 5.5 and 6.0 years, depending on the grantee’s employee status. In 2006, we analyzed historical trends in these variables on a quarterly basis, resulting in a decrease in our expected volatility to 39% during the fourth quarter of 2006, while the range of the expected term remained at 5.5 to 6 years. For the year ended December 31, 2006 we elected to use the simplified method of determining the expected term as permitted by SAB 107 the range of the expected term remained unchanged at 5.5 to 6 years. We continue to base the estimate of risk-free rate on the U.S. Treasury yield curve in effect at the time of grant. We have never paid cash dividends and do not currently intend to pay cash dividends, and have certain restrictions under its credit facility to pay dividends and thus have assumed a 0% dividend yield. Stock-based compensation for the year ended December 31, 2006 has been reduced for estimated forfeitures based on an estimated forfeiture rate of 3.25%. When estimating forfeitures, we consider voluntary termination behaviors as well as trends of actual option forfeitures. These conclusions were based on several factors, including past company history, current and future trends, comparable benchmarked data and other key metrics.

Claims and Insurance Accruals

 We maintain self-insured retention limits for certain insurance policies. The liabilities associated with the risk we retain are estimated in part based on historical experience, third-party actuarial analysis, demographics, nature and severity, past experience and other assumptions. The liabilities for self-funded retention are included in claims and insurance reserves based on claims incurred, with liabilities for unsettled claims and claims incurred but not yet reported being actuarially determined with respect to workers’ compensation and auto liability claims and estimated based on management’s evaluation of the nature and severity of individual claims and historical experience with respect to all other liabilities. A significant number of these claims typically take several years to develop and even longer to ultimately settle. These estimates tend to be reasonably accurate over time; however, the actual liabilities could vary materially from management's estimates and assumptions regarding severity of claims, medical cost inflation, as well as specific case facts can create short-term volatility in estimates. Management believes that these reserves are adequate.

Income Taxes

 Deferred tax assets and liabilities are determined based on the difference between the financial reporting and the tax bases of assets and liabilities and are measured using the tax rates and laws that are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.A valuation allowance is established, when necessary, to reduce deferred income tax assets to the amount that is more likely than not to be realized. Realization is dependent on generating sufficient taxable income of a specific nature prior to the expiration of any loss carryforwards or capital losses. The asset may be reduced if estimates of future taxable income during the carryforward period are reduced. In addition, we maintain reserves for certain tax items, which are included in income taxes payable on our consolidated balance sheet. We periodically review these reserves to determine if adjustments to these balances are necessary.

Derivative Financial Instruments

 Effective October 2005, we entered into an amortizing three-year interest rate swap arrangement with a notional amount of $175 million at inception to apply a fixed interest rate against the six-year $175 million loan arrangement entered into to facilitate the acquisition of inVentiv Communications, Inc. We entered into this interest rate swap agreement to modify the interest rate characteristics of our outstanding long-term debt. At the inception of the hedged item’s designation, and at least quarterly thereafter, we assess whether derivatives used to hedge transactions are highly effective in offsetting changes in the cash flow of the hedged item. To the extent the instruments are considered to be effective, changes in fair value are recorded as a component of other comprehensive income (loss). To the extent there is any hedge ineffectiveness, changes in fair value relating to the ineffective portion are immediately recognized in earnings (interest expense).

 From October 2005 to July 2006, we did not qualify for hedge accounting and recorded a $2.9 million reduction to interest expense relating to the mark-to-market adjustment, and a corresponding derivative asset of approximately $2.9 million, which was recorded in Deposits and Other Assets on the Consolidated Balance Sheet. The fair values of the interest rate swaps were obtained from dealer quotes. These values represent the estimated amount we would receive or pay to terminate the agreement taking into consideration the difference between the contract rate of interest and rates currently quoted for agreements of similar terms and maturities.

 On July 17, 2006, we formally designated the interest rate swap as a cash flow hedge pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. We employed the dollar offset method by performing a shock test to assess ineffectiveness and utilized the hypothetical derivative model to measure ineffectiveness. The hypothetical derivative contains the same terms and conditions as the original derivative, but was initiated in July 2006. From July 2006 to December 2006, the fair market value of the derivative asset decreased to approximately $1.1 million, resulting in a $1.8 million decrease in the derivative asset; approximately $1.2 million (approximately $0.7 million, net of taxes) adjustment to Other Comprehensive Income; and $0.6 million of interest expense due to ineffectiveness of the hedged item.

New Accounting Pronouncements

 In February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115. SFAS No. 159 provides companies with an option to report selected financial assets and liabilities at fair value. This statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions of FASB Statement No. 157, Fair Value Measurements. We have not yet determined the impact SFAS 159 will have on its consolidated results of operations or consolidated financial position.

 In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements". SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of SFAS 157 are effective for the fiscal year beginning January 1, 2008. We have not yet determined the impact SFAS 157 will have on its consolidated results of operations or consolidated financial position.

 In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin (“SAB”) No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Current Year Misstatements. SAB No. 108 requires analysis of misstatements using both an income statement (rollover) approach and a balance sheet (iron curtain) approach in assessing materiality and provides for a one-time cumulative effect transition adjustment. SAB No. 108 is effective for our 2006 annual financial statements. The adoption of SAB No. 108 did not have a material impact on our consolidated results of operations or consolidated financial position.

 In July 2006, the FASB issued FASB Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109. FIN 48 clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. FIN 48 also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 applies to all tax positions related to income taxes subject to FASB Statement No. 109, Accounting for Income Taxes (“FASB No. 109”). FIN 48 is effective for fiscal years beginning after December 15, 2006; as such, we will adopt FIN 48 on January 1, 2007. Differences between the amounts recognized in the statements of financial position prior to the adoption of FIN 48 and the amounts reported after adoption should be accounted for as a cumulative-effect adjustment recorded to the beginning balance of retained earnings. We evaluated the impact of the adoption of FIN 48 and do not expect it to have a material impact on the Company’s consolidated statements of operations, financial position, cash flows, or other significant matters, such as debt covenants or the Company’s normal business practices.

 On November 10, 2005, the FASB issued Interpretation No. 45-3, Application of FASB Interpretation No. 45 to Minimum Revenue Guarantees Granted to a Business or Its Owners (“FIN 45-3”). FIN 45-3 amends FIN 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, to expand the scope to include guarantees granted to a business, such as a physician’s practice, or its owner(s), that the revenue of the business for a period will be at least a specified amount. Under FIN 45-3, the accounting requirements of FIN 45 are effective for any new revenue guarantees issued or modified on or after January 1, 2006 and the disclosure of all revenue guarantees, regardless of whether they were recognized under FIN 45, is required for all interim and annual periods beginning after January 1, 2006. The adoption of FIN 45-3 did not have a material impact on our consolidated results of operations or consolidated financial position.

 In June 2005, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Account Standard (“SFAS”) No. 154, Accounting Changes and Error Corrections, (“SFAS No.154”) a replacement of Accounting Principles Board ("APB") Opinion No. 20, Accounting Changes, and Statement No. 3, Reporting Accounting Changes in Interim Financial Statements. SFAS No. 154 changes the requirements for the accounting for and the reporting of a change in accounting principle. Previously, most voluntary changes in accounting principles required recognition by recording a cumulative effect adjustment within net income in the period of change. SFAS No. 154 requires retrospective application to prior periods’ financial statements, unless it is impracticable to determine either the specific period effects or the cumulative effect of the change. SFAS No. 154 is effective for accounting changes made in fiscal years beginning after December 15, 2005. The implementation of SFAS No. 154 did not have a material impact on our consolidated balance sheets, consolidated income statements or consolidated statements of cash flows.

Recent Business Developments

Acquisitions

Ignite - In February 2007, we signed a definitive agreement to acquire ignite comm.net and Incendia Health, Inc. (collectively, “Ignite”) for approximately $20.0 million in cash and stock, excluding post-closing adjustments and direct acquisition costs, which have yet to be finalized. We will be obligated to make certain earn-out payments, which may be material, contingent on Ignite's performance measurements during 2007 through 2009. Ignite is based in Irvine, California, and specializes in medical advertising and interactive communications targeting patients and caregivers. Ignite’s financial results were not included in the consolidated financial statements since the definitive agreement was signed after December 31, 2006. Ignite is expected to be included in the inVentiv Communications segment.

Chamberlain - In February 2007, we signed a definitive agreement to acquire Chamberlain Communications Group, Inc. (“Chamberlain”) for approximately $13.0 million in cash and stock, excluding post-closing adjustments and direct acquisition costs, which have yet to be finalized. We will be obligated to make certain earn-out payments, which may be material, contingent on Chamberlain's performance measurements during 2007 through 2009. Chamberlain is based in New York, and specializes in public relations in the healthcare industry. Chamberlain’s financial results were not included in the consolidated financial statements since the definitive agreement was signed after December 31, 2006. Chamberlain is expected to be included in the inVentiv Communications segment.

The terms of our acquisitions completed during 2004, 2005 and 2006 are summarized in footnote 3 to our Consolidated Financial Statements included in Part II, Item 8 of this report.

A summary of the purchase price consideration for the acquisitions is as follows, in thousands:

2004 and 2005 acquisitions

Purchase price consideration		Franklin		Smith Hanley		HHI		PRS		inChord
Cash	$	6,667	$	30,000	$	5,000	$	9,100	$	172,500
Stock		3,580		21,215		747		4,105		12,145
Direct acquisition and other Post-closing adjustments		1,064		1,685		478		440		12,160
Contingent consideration for completed measurement periods		6,788		11,209		10,517		1,989		28,741
Total	$	18,099	$	64,109	$	16,742	$	15,634	$	225,546

2006 acquisitions

Purchase price consideration		Adheris		JSAI		Synergos		MedConference		DialogCoach
Cash	$	45,349	$	6,903	$	4,000	$	4,900	$	3,500
Stock		14,617		1,684		1,929		2,168		1,548
Direct acquisition and other Post-closing adjustments		15,341		1,376		500		1,025		667
Contingent consideration for completed measurement periods		7,911		--		847		1,595		--
Total	$	83,218	$	9,963	$	7,276	$	9,688	$	5,715

 The following represents the allocation of the purchase price to the acquired assets of the 2004, 2005 and 2006 acquisitions. The allocations are based upon the estimated fair value of the assets acquired and liabilities assumed as of the respective acquisition date.

Allocation of purchase price (2004-2005 acquisitions)		Franklin			Smith Hanley			HHI			PRS			inChord
Current assets	$	3,165		$	13,859		$	1,005		$	1,368		$	66,223
Property and equipment, and other noncurrent assets		432			670			48			183			13,533
Goodwill		12,856			37,237			14,317			10,798			107,670
Identifiable intangible assets		2,557			17,400			1,610			3,870			94,300
Liabilities assumed		(911	)		(5,057	)		(238	)		(585	)		(56,165	)
Minority interest		--			--			--			--			(15	)
Total	$	18,099		$	64,109		$	16,742		$	15,634		$	225,546

Allocation of purchase price (2006 acquisitions)		Adheris			JSAI			Synergos			MedConference			DialogCoach
Current assets	$	23,492		$	6,215		$	900		$	1,200		$	790
Property and equipment, and other noncurrent assets		810			558			49			238			--
Goodwill		44,937			5,257			4,186			5,571			3,398
Identifiable intangible assets		28,170			4,990			2,411			3,000			2,070
Liabilities assumed		(14,191	)		(7,057	)		(270	)		(321	)		(543	)
Total	$	83,218		$	9,963		$	7,276		$	9,688		$	5,715

Goodwill represents the excess of the purchase price over the fair value of tangible and identifiable intangible assets.

Divesting Transactions

During 2002 and 2003, we divested our European Contract Sales businesses. We have been receiving payments subsequent to the divestiture of the German-based business based on the subsequent earnings of the divested unit. For the years ended December 31, 2006, 2005 and 2004, we received approximately $1.4 million, $1.7 million and $2.1 million, respectively, relating to these divestitures. In addition, approximately $1.2 million of tax liability was reversed since the receivership of the previously-divested France-based unit was finalized during the fourth quarter of 2006.

Results of Operations

The following sets forth, for the periods indicated, certain components of our operating earnings, including such data stated as a percentage of revenues:

	For the Years Ended December 31,
	2006					2005					2004
	(in thousands, except for per share data)
Revenues:				Percentage*					Percentage*					Percentage *
inVentiv Clinical	$	149,786		19.5	%	$	113,700		20.4	%	$	21,688		6.2	%
inVentiv Communications		257,055		33.6	%		48,726		8.8	%		--		--
inVentiv Commercial		359,404		46.9	%		393,886		70.8	%		330,496		93.8	%
Total revenues		766,245		100.0	%		556,312		100.0	%		352,184		100.0	%
Cost of services:
inVentiv Clinical		100,632		67.2	%		75,177		66.1	%		14,487		66.8	%
inVentiv Communications		161,533		62.8	%		32,440		66.6	%		--		--
inVentiv Commercial		284,584		79.2	%		309,408		78.6	%		265,246		80.3	%
Total cost of services		546,749		71.4	%		417,025		75.0	%		279,733		79.4	%
Selling, general and administrative expenses		141,418		18.4	%		79,313		14.3	%		38,539		10.9	%
Other operating income		--		--			--		--			264		--
Total operating income		78,078		10.2	%	$	59,974		10.8	%	$	34,176		9.7	%
Interest expense		(11,361	)	(1.5	)%		(3,955	)	(0.7	)%		(922	)	(0.3	)%
Interest income		2,694		0.4	%		1,409		0.3	%		678		0.2	%
Income from continuing operations before income tax provision, minority interest in income of subsidiary and income from equity investments		69,411		9.1	%		57,428		10.4	%		33,932		9.6	%
Income tax provision		(19,166	)	(2.5	)%		(14,229	)	(2.6	)%		(3,802	)	(1.1	)%
Income from continuing operations before minority interest in income of subsidiary and income from equity investments		50,245		6.6	%		43,199		7.8	%		30,130		8.5	%
Minority interest in income of subsidiary		(1,207	)	(0.2	)%		(224	)	--			--		--
Equity earnings in investments		160		--			107		--			--		--
Income from continuing operations		49,198		6.4	%		43,082		7.8	%		30,130		8.5	%
Income from discontinued operations:
Gains on disposals of discontinued operations, net of taxes		2,037		0.3	%		781		0.1	%		1,002		0.3	%
Income from discontinued operations		2,037		0.3	%		781		0.1	%		1,002		0.3	%
Net income	$	51,235		6.7	%	$	43,863		7.9	%	$	31,132		8.8	%
Earnings per share:
Continuing operations:
Basic	$	1.69				$	1.60				$	1.26
Diluted	$	1.64				$	1.53				$	1.18
Discontinued operations:
Basic	$	0.07				$	0.03				$	0.04
Diluted	$	0.06				$	0.03				$	0.04
Net income:
Basic	$	1.76				$	1.63				$	1.30
Diluted	$	1.70				$	1.56				$	1.22

* Cost of services is expressed as a percentage of segment revenue. All other line items are displayed as a percentage of total revenues.

Year Ended December 31, 2006 Compared to Year Ended December 31, 2005 

Revenues: Revenues increased by approximately $209.9 million, or 37.7%, to $766.2 million in the year ended December 31, 2006, from $556.3 million in the year ended December 31, 2005.

inVentiv Clinical’s revenues were $149.8 million during the year ended December 31, 2006, an increase of $36.1 million compared to $113.7 million during the year ended December 31, 2005. Revenues in the clinical staffing and recruiting division were higher in 2006 predominantly due to increased placement of clinical staffing personnel. The clinical staffing and recruiting division also typically experiences a decrease in personnel during the first quarter of a year as clients may decide not to continue to employ these temporary personnel. This “falloff” was less significant in 2006 than 2005. Finally, in April 2006, the Company acquired Synergos, which complements the segment by strengthening the functional outsourcing service.

inVentiv Communications was established principally through the acquisitions of inChord in October 2005, Adheris in February 2006 and JSAI in April 2006, and contributed approximately $257.0 million of revenues during the year ended December 31, 2006, versus approximately $48.7 million of revenue from the acquisition date of inChord through December 31, 2005. This segment specializes in pharmaceutical advertising, branding, marketing and patient and physician education.

Revenues in our inVentiv Commercial business were $359.4 million, a decrease of $34.5 million or 8.8% from the $393.9 million in the same period in 2005. This decrease resulted primarily from anticipated wind-downs of certain contracts, and was partially offset by additional revenue during 2006 from acquisitions, such as PRS, which was acquired in August 2005, and MedConference and DialogCoach, which were acquired during the fourth quarter of 2006.

Cost of Services: Cost of services increased by approximately $129.7 million or 31.1%, to $546.7 million for the year ended December 31, 2006 from $417.0 million in the year ended December 31, 2005. Cost of services decreased as a percentage of revenues to 71.4% from 75.0% in the year ended December 31, 2006 and 2005, respectively, mainly due to increased acquisitions that are contributing higher margins than the historical Commercial business. Overall cost of services increased due to increased revenue over the same period; in addition, cost of services increased due to $2.4 million of share-based compensation expense not recorded in prior years. On January 1, 2006, inVentiv adopted the provisions of Statement of Financial Accounting Standards No. 123 (Revised 2004) (SFAS 123R), Share-Based Payment, which establishes accounting for share-based awards exchanged for employee services and requires companies to expense the estimated fair value of these awards over the requisite employee service period. In prior periods, inVentiv recorded compensation expense for unvested restricted shares over the applicable vesting periods. Starting in January 2006, as a result of adopting SFAS 123R, inVentiv has also recorded compensation expense for its stock options. For further details on the new accounting policy, see section on Critical Accounting Policies.

inVentiv Clinical’s cost of services increased by approximately $25.4 million, or 33.9%, to $100.6 million during the year ended December 31, 2006 from $75.2 million during the year ended December 31, 2005. Cost of services as a percentage of revenues increased from 66.1% during the year ended December 31, 2005 to 67.2% during the same period in 2006.

inVentiv Communications was acquired starting in October 2005 and incurred approximately $161.5 million of cost of sales during the year ended December 31, 2006. Cost of services was $32.4 million from the inChord acquisition date through December 31, 2005. Cost of sales was 62.8% of this segment’s revenues in 2006 and 66.6% for the three-month period in 2005. This segment specializes in pharmaceutical advertising, branding, marketing and patient and physician education. Pursuant to the acquisition of inChord, the Company assumed a $7.5 million existing incentive plan liability (out of a potential $15 million liability) on inChord’s balance sheet relating to certain performance thresholds of the segment over a three-year period from 2005 through 2007. The Company has monitored these performance thresholds on a quarterly basis. At December 31, 2006, as a result of new business and a strengthened outlook for inChord’s business during 2007, management felt it was appropriate to record an additional $3.5 million (of which $1.2 million is recorded in cost of services and $2.3 million is recorded in SG&A) of the potential $15 million liability since the likelihood of achieving the next threshold is probable and the amount is estimable, pursuant to SFAS No. 5, Accounting for Contingencies. The Company will continue to monitor these performance thresholds, which may result in up to an additional $3.7 million of expenses, but currently the Company does not believe that it is probable that the final threshold will be met.

Cost of services at inVentiv Commercial decreased by approximately $24.8 million, or 8.0%, to $284.6 million in the year ended December 31, 2006 from $309.4 million in the year ended December 31, 2005, mainly due to the decrease in revenues. Cost of services was 79.2% of inVentiv Commercial revenue in the year ended December 31, 2006, compared to 78.6% in the year ended December 31, 2005, mainly due to increased compensation expense in 2006 for unvested shares as discussed above.

Selling, General and Administrative Expenses (“SG&A”): SG&A expenses increased by approximately $62.1 million, or 78.3%, to $141.4 million from $79.3 million in the year ended December 31, 2006 and 2005, respectively. This increase was primarily due to SG&A expenses at inChord, which was acquired in October 2005, and additional SG&A from acquisitions consummated in 2006; increased compensation levels in 2006 versus 2005; and $5.1 million of share-based compensation expense, which was new in 2006, as described above in the cost of services section.

SG&A expenses at inVentiv Clinical was approximately $37.6 million in 2006, compared to $29.1 million during 2005 due to increased selling expense and commissions from additional business; additional staffing requirements; SG&A expense from Synergos, which was acquired on April 1, 2006; and increased compensation expense relating to the adoption of SFAS 123R.

SG&A expenses at inVentiv Communications, which was acquired in October 2005, was approximately $60.6 million for the year ended December 31, 2006, and $10.6 million for the period in 2005 subsequent to the acquisition. As described in the cost of services’ section, the Company recorded an additional $3.5 million (of which $1.2 million is recorded in cost of services and $2.3 million is recorded in SG&A) of potential $15.0 million in liabilities relating to certain performance thresholds of the segment over a three-year period. See above for further details.

SG&A expenses at inVentiv Commercial increased by approximately $1.5 million, or 5.2%, to $30.5 million in the year ended December 31, 2006 from $29.0 million incurred in the year ended December 31, 2005. This increase was mainly due to the increased compensation expense attributable to the adoption of SFAS 123R this year, and additional SG&A from new acquisitions during the fourth quarter of 2006.

Other SG&A was approximately $12.7 million for the year ended December 31, 2006, an increase of approximately $2.1 million or 19.4% from $10.6 million for the year ended December 31, 2005. Almost all of this increase was related to increases in stock-based compensation expense in 2006, as described above.

Provision for Income Taxes: In June 2006, we recognized a tax benefit of approximately $9.1 million related to net operating losses associated with a previously-divested unit, as management determined that it is more likely than not that this deferred tax asset will be realized. Including these tax benefits, our annual effective tax rate was 27.6% in 2006.

In March 2005, we recognized a tax benefit of approximately $1.6 million primarily related to prior period tax contingencies, which are no longer required. During the third quarter of 2005, we recorded a tax benefit of approximately $6.7 million primarily related to the reversal of a previously recorded valuation allowance as we determined an additional portion of its deferred tax asset was more likely than not expected to be realized. Including these tax benefits, our annual effective tax rate was 24.8% in 2005.

Our current effective tax rate is based on current projections for earnings in the tax jurisdictions in which we do business and is subject to taxation. Our effective tax rate could fluctuate due to changes in earnings between operating entities and related tax jurisdictions, or due to the potential tax impact arising from previous divestitures.

In July 2006, the FASB issued FASB Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109, to create a single model to address accounting for uncertainty in tax positions. FIN 48 clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the consolidated financial statements. FIN 48 also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 applies to all tax positions related to income taxes subject to FASB Statement No. 109, Accounting for Income Taxes (“FASB No. 109”). FIN 48 is effective for fiscal years beginning after December 15, 2006; as such, the Company will adopt FIN 48 as of January 1, 2007, as required. Differences between the amounts recognized in the consolidated financial statements prior to the adoption of FIN 48 and the amounts reported after adoption should be accounted for as a cumulative-effect adjustment recorded to the beginning balance of retained earnings. We conducted an internal review of its uncertain tax positions resulting from the adoption of FIN 48. The adoption of FIN 48 is not expected to have a material impact on our consolidated results of operations, financial position and cash flows.

Discontinued Operations: For the year ended December 31, 2006 and 2005, earnings from discontinued operations, net of taxes, were approximately $2.0 million and $0.8 million, respectively. The gains on disposals of discontinued operations mainly consisted of contingency payments due from our previously-divested Germany-based unit. In addition, approximately $1.2 million of tax liability was reversed since the receivership of the previously-divested France-based unit was finalized during the fourth quarter of 2006.

Net Income and Earnings Per Share (“EPS”): inVentiv’s net income increased by approximately 16.8% to $51.2 million, from net income of $43.9 million in the year ended December 31, 2006 and 2005, respectively. Diluted earnings per share increased to earnings of $1.70 per share for the 2006 from earnings of $1.56 per share for 2005.  Operating results were higher due to increased results in inVentiv Communications and the new acquisitions, offset by stock-based compensation expense recorded as a result of adopting SFAS 123R. Earnings per share were also affected because of approximately 1.9 million additional shares outstanding in 2006 over 2005.

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004 

 Revenues: Revenues increased by approximately $204.1 million, or 58.0%, to $556.3 million in the year ended December 31, 2005, from $352.2 million in the year ended December 31, 2004, mainly due to increased business in our inVentiv Commercial business and company acquisitions during 2004 and 2005, as more fully described below.

As a result of the fourth quarter 2004 acquisitions in inVentiv Clinical, the segment has contributed approximately $21.7 million of revenues in 2004 and $113.7 million of revenues for the year ended December 31, 2005. The key driver of increased business was due to increased hiring in permanent placement and clinical staffing.

In our inVentiv Communications segment, which was initially established in October 2005 via acquisition, there was approximately $48.7 million of revenue recorded from the acquisition date through December 31, 2005.

Revenues in our inVentiv Commercial business were $393.9 million in the year ended December 31, 2005, an increase of $63.4 million or 19.2% from $330.5 million in the year ended December 31, 2004, and accounted for 70.8% of total revenues for the year ended December 31, 2005. The majority of this growth is due to increased business in our inVentiv Pharma Teams, offset by decreases attributable to contract conversions of certain clients. There were also two acquisitions (Franklin in June 2004 and PRS in August 2005), which contributed to the increase in revenues.

Cost of Services: Cost of services increased by approximately $137.3 million or 49.1%, to $417.0 million during the year ended December 31, 2005 from $279.7 million in the year ended December 31, 2004, mainly due to increased business in our inVentiv Commercial business and company acquisitions during 2004 and 2005, as mentioned previously. Cost of services decreased as a percentage of revenues to 75.0% from 79.4% in the year ended December 31, 2005 and 2004, respectively. The 2004 and 2005 acquisitions in the inVentiv Clinical and inVentiv Communications segments generally tend to have higher margins than the inVentiv Commercial group due to the nature of the services provided.

inVentiv Clinical’s cost of services in 2005 was approximately $75.2 million, compared to approximately $14.5 million during the fourth quarter of 2004, when the segment was established via the Smith Hanley and HHI acquisitions. Cost of services as a percentage of revenues was in line from the previous year. The increase in cost was due to the full year effect of the acquisitions and increased hiring in permanent placement and clinical staffing.

Our inVentiv Communications segment incurred approximately $32.4 million in cost of services from the October 5, 2005 acquisition date through December 31, 2005. The segment’s cost of services was approximately 66.6 % of the segment’s revenues.

Cost of services at the inVentiv Commercial business increased by approximately $44.2 million, or 16.6%, to $309.4 million in the year ended December 31, 2005 from $265.2 million in the year ended December 31, 2004. This variance percentage is lower than the percentage increase in revenue between the related periods. Cost of services was 78.6% of inVentiv Commercial revenue in the year ended December 31, 2005, compared to 80.3% in the year ended December 31, 2004. The decrease of cost of services as a percentage of revenue in 2005 as compared to 2004 was attributable to ongoing cost savings measures implemented by management to align our support and infrastructure with the current level of operations. In addition, we acquired Franklin in June 2004, as described previously, which is a higher margin division than the core commercial services business.

SG&A: SG&A expenses increased by approximately $40.8 million, or 105.8%, to $79.3 million from $38.5 million in the years ended December 31, 2005 and 2004, respectively. This increase was primarily due to increased compensation levels in 2005 versus 2004, SG&A expenses incurred at the divisions acquired in 2004 and 2005, increases in professional fees related to increased acquisitions and compliance with the internal control standards of Section 404 of the Sarbanes-Oxley Act of 2002, and the hiring of an internal audit department in 2005.

SG&A expenses at our inVentiv Clinical business units, which were acquired during the fourth quarter of 2004, were approximately $29.0 million during the year ended December 31, 2005, compared to $5.5 million during the fourth quarter of 2004.

SG&A expenses at our newly acquired inVentiv Communications businesses were approximately $10.6 million in 2005, which reflects expenses incurred during the fourth quarter, when the acquisition of inVentiv Communications, Inc. was consummated.

SG&A expenses at inVentiv Commercial increased by approximately $5.0 million, or 20.8%, to $29.0 million in the year ended December 31, 2005 from $24.0 million incurred in the year ended December 31, 2004. This increase was due to increased compensation and benefits in 2005 versus 2004, mainly due to increased results during 2005; $2.1 million of additional SG&A at Franklin, which was acquired in June 2004; and additional SG&A at PRS, which was acquired in August 2005.

Other SG&A was approximately $10.6 million for the year ended December 31, 2005, an increase of approximately $1.6 million or 18.2% from $9.0 million for the year ended December 31, 2004. The increase was mainly related to increases in compensation as a result of improved company performance, professional fees primarily related to increased acquisitions and our compliance with the internal control standards of Section 404 of the Sarbanes-Oxley Act of 2002, and the hiring of an internal audit department in 2005. Due to increased acquisitions over the last two years, our internal and external audit expenses have increased substantially from 2004.

Provision for Income Taxes: In March 2005, we recorded a tax benefit of approximately $1.6 million primarily related to prior period tax contingencies, which are no longer required. During the third quarter of 2005, we recorded a tax benefit of approximately $6.7 million primarily related to the reversal of a previously recorded valuation allowance as the Company determined an additional portion of its deferred tax asset was more likely than not expected to be realized. Including these tax benefits, our annual effective tax rate was 24.8% in 2005.

During the fourth quarter of 2004, we recorded a tax benefit of approximately $7.1 million primarily related to the divestiture and shutdown of certain former subsidiaries. Our tax rate during the fourth quarter benefited additionally from $2.0 million of net federal & state tax adjustments and other one-time reversals, primarily related to prior period tax contingencies, which are no longer required. Including these tax benefits, our annual effective tax rate was 11.2% in 2004.

Our current effective tax rate is based on current projections for earnings in the tax jurisdictions in which we do business and is subject to taxation. Our effective tax rate could fluctuate due to changes in earnings between operating entities and related tax jurisdictions, or due to the potential tax impact arising from previous divestitures.

Discontinued Operations: For the year ended December 31, 2005 and 2004, income from discontinued operations, net of taxes, was $0.8 million and $1.0 million, respectively, which mainly consisted of contingency payments due from our previously divested Germany and Hungary (2004 only) based operations, as more fully described in Recent Business Developments.

Net Income and Earnings Per Share (“EPS”): Our net income increased by approximately $12.8 million from $31.1 million in 2004 to $43.9 million in 2005. Diluted earnings per share increased to $1.56 per share for the year ended December 31, 2005 from $1.22 for the year ended December 31, 2004.  Operating results were higher due to increased revenues from certain contracts; the middle to late 2004 and 2005 acquisitions; and various cost saving strategies in 2005. This was slightly offset by the higher tax benefits recorded in 2004 than 2005.

Liquidity and Capital Resources

At December 31, 2006, we had $79.8 million of unrestricted cash and equivalents, an increase of $6.7 million from December 31, 2005. For the year ended December 31, 2005 compared to 2006, cash provided by operations increased by $30.4 million from $55.3 million to $85.7 million. Cash used in investing activities decreased from $196.1 million to $70.2 million for the year ended December 31, 2005 and 2006, respectively. Cash from financing activities decreased from a source of $163.2 million to a use of $9.0 million over the same comparative periods.

 Cash provided by operations was $85.7 million during the year ended December 31, 2006, while cash provided by operations was $55.3 million in the year ended December 31, 2005. This increase was, in large part, due to the increased operating cash flows from inVentiv Communications, Inc. and other acquisitions relating to new business. Timing of advances recorded as deferred revenue in new contracts from certain inVentiv Communications, Inc. clients increased dramatically in 2006 over 2005.

 Cash used in investing activities decreased by $125.9 million from $196.1 million to $70.2 million for the year ended December 31, 2005 and 2006, respectively. The Company paid $187.0 million for the 2005 acquisitions of inVentiv Communications, Inc. and PRS, while spending $61.5 million in acquisitions for the 2006 acquisitions of Adheris, JSAI, Synergos, MedConference and DialogCoach.

 Cash from financing activities decreased from a source of $163.2 million to a use of $9.0 million over the same comparative periods, mainly due to the Company’s borrowing of $175.0 million in 2005 pursuant to the acquisition of inChord as more fully described below, with no corresponding amounts drawn on the line of credit in 2006. During 2006, inVentiv adopted SFAS 123 R, resulting in a $8.6 million excess tax benefit, which is displayed as a financing inflow and corresponding operating outflow. This did not exist in 2005.

 Our principal external source of liquidity is our syndicated, secured credit agreement, which we entered into with UBS AG, Stamford Branch, and others in connection with the inVentiv Communications, Inc. acquisition. As of December 31, 2006, we complied with the requirements, including all covenants, of the credit facility. The key features of this credit facility are as follows:

·   A $175 million term loan facility was made available to inVentiv in a single drawing at the time of the inVentiv Communications, Inc. transaction. The credit agreement also includes a $50 million revolving credit facility, of which $5 million is available for the issuance of letters of credit, and a $5 million swingline facility.

·   The term loan will mature on the sixth anniversary of the Credit Agreement, with scheduled quarterly amortization of 1% per year during years one through five and 95% during year six. The revolving loans will mature on the sixth anniversary of the Credit Agreement.

·   Amounts advanced under the credit agreement must be prepaid with a percentage, determined based on a leverage test set forth in the credit agreement, of Excess Cash Flow (as defined in the credit agreement) and the proceeds of certain non-ordinary course asset sales and certain issuances of debt obligations or equity securities of inVentiv and its subsidiaries, subject to certain exceptions. We may elect to prepay the loans, in whole or in part at any time, in certain minimum principal amounts, without penalty or premium (other than normal LIBOR break funding costs). Amounts borrowed under the credit agreement that are repaid or prepaid may not be reborrowed.

·   Interest on the loans accrue, at our election, at either (1) the Alternate Base Rate (which is the greater of UBS’s prime rate and federal funds effective rate plus 1/2 of 1%) or (2) the Adjusted LIBOR Rate, with interest periods determined at our option of 1, 2, 3 or 6 months (or, if the affected lenders agree, 9 months), in each case plus a spread based on the type of loan and method of interest rate determination elected.

·   The credit agreement contains, among other things, conditions precedent, representations and warranties, covenants and events of default customary for facilities of this type. Such covenants include certain limitations on indebtedness, liens, sale-leaseback transactions, guarantees, fundamental changes, dividends, acquisitions and transactions with affiliates. The credit agreement also includes covenants under which we are required to maintain a maximum leverage ratio and minimum interest rate coverage and fixed charge coverage ratios that vary based on the amount of time elapsed since the initial extension of credit. We are in compliance with all covenants.

Effective October 2005, we entered into a three- year swap arrangement for $175 million to hedge against the six-year $175 million loan arrangement entered into to facilitate the acquisition of inVentiv Communications, Inc.

We believe that our cash and equivalents, cash to be provided by operations and available credit under our credit facility will be sufficient to fund our current operating requirements over the next 12 months. However, we cannot assure you that these sources of liquidity will be sufficient to fund all internal growth initiatives, investments and acquisition activities that we may wish to pursue. If we pursue significant internal growth initiatives or if we wish to acquire additional businesses in transactions that include cash payments as part of the purchase price, we may pursue additional debt or equity sources to finance such transactions and activities, depending on market conditions. The acquisition agreements entered into in connection with our 2004, 2005 and 2006 acquisitions include earn-out provisions pursuant to which the sellers will become entitled to additional consideration, which may be material, if the acquired businesses achieve specified performance measurements. See footnote 3 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Commitments and Contractual Obligations

A summary of our current contractual obligations and commercial commitments is as follows:

(Amounts in thousands)			Amounts Due In
Contractual Obligations		Total Obligation		Less than 1 Year		1 - 3 years		3 -5 years	More than 5 years
Long term debt obligations (a)	$	210,796	$	11,807	$	24,406	$	174,583		--
Capital lease obligations (b)		37,601		13,692		20,185		3,724		--
Operating leases (c)		65,332		15,638		21,150		15,450		13,094
Acquisition-related incentive (d)		11,025		--		11,025		--		--
Total obligations	$	324,754	$	41,137	$	76,766	$	193,757	$	13,094

(a)   These future commitments represent the principal and interest payments under the $175 million term loan under our credit facility.

(b)   These future commitments include interest and management fees, which are not recorded on the Consolidated Balance Sheet as of December 31, 2006 but will be recorded as incurred.

(c)   Operating leases include facility lease obligations in which the lease agreement may expire during the five-year period, but are expected to continue on a monthly basis beyond the lease term, as provided for in the leasing arrangements.

(d)   The former stockholders of inVentiv Communications, Inc. are contractually obligated to reimburse us for $5.0 million of this amount.

 The acquisition agreements entered into in connection with all of our acquisitions include earn-out provisions pursuant to which the sellers will become entitled to additional consideration, which may be material, if the acquired businesses achieve specified performance measurements. See footnote 3 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Effect of Inflation

 Because of the relatively low level of inflation experienced in the United States, inflation did not have a material impact on our consolidated results of operations for 2006, 2005 or 2004.

Off-Balance Sheet Arrangements

 As of December 31, 2006, we did not have any off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Long-Term Debt Exposure

At December 31, 2006, we had $164.6 million debt outstanding under our unsecured term loan. See Liquidity and Capital Resources section for further detail on our credit agreement. We will incur variable interest expense with respect to its outstanding loan. This interest rate risk may be partially offset by our derivative financial instrument, as described below. Based on our debt obligation outstanding at December 31, 2006, a hypothetical increase or decrease of 10% in the variable interest rate would have an immaterial effect on interest expense due to the fixed rate associated with the derivative financial instrument.

Derivative Financial Instrument

Effective October 2005, we entered into an amortizing three-year interest rate swap arrangement with a notional amount of $175 million at inception to apply a fixed interest rate against the six-year $175 million loan arrangement entered into to facilitate the acquisition of inChord. We entered into this interest rate swap agreement to modify the interest rate characteristics of our outstanding long-term debt. At the inception of the hedged item’s designation, and at least quarterly thereafter, we assess whether derivatives used to hedge transactions are highly effective in offsetting changes in the cash flow of the hedged item. To the extent the instruments are considered to be effective, changes in fair value are recorded as a component of other comprehensive income (loss). To the extent there is any hedge ineffectiveness, changes in fair value relating to the ineffective portion are immediately recognized in earnings (interest expense).

From October 2005 to July 2006, we did not qualify for hedge accounting and recorded a $2.9 million reduction to interest expense relating to the mark-to-market adjustment, and a corresponding derivative asset of approximately $2.9 million, which was recorded in Deposits and Other Assets on the Consolidated Balance Sheet. The fair values of the interest rate swaps were obtained from dealer quotes. These values represent the estimated amount we would receive or pay to terminate the agreement taking into consideration the difference between the contract rate of interest and rates currently quoted for agreements of similar terms and maturities.

On July 17, 2006, we formally designated the interest rate swap as a cash flow hedge pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. We employed the dollar offset method by performing a shock test to assess ineffectiveness and utilized the hypothetical derivative model to measure ineffectiveness. The hypothetical derivative contains the same terms and conditions as the original derivative, but was initiated in July 2006. From July 2006 to December 2006, the fair market value of the derivative asset decreased to approximately $1.1 million, resulting in a $1.8 million decrease in the derivative asset; approximately $1.2 million (approximately $0.7 million, net of taxes) adjustment to Other Comprehensive Income; and $0.6 million of interest expense due to ineffectiveness of the hedged item.

Foreign Currency Exchange Rate Exposure

We are not currently affected by foreign currency exchange rate exposure, except for any fluctuations in the foreign bank accounts remaining from the divestitures of our European business units and our Canadian subsidiary, equity investments and minority interests in inVentiv Communications’ foreign business units, which are not material to its consolidated financial statements. Our treatment of foreign subsidiaries is consistent with the guidelines set forth in SFAS 52, Foreign Currency Translations. The financial statements of our subsidiaries expressed in foreign currencies are translated from the respective functional currencies to U.S. Dollars, with results of operations and cash flows translated at average exchange rates during the period, and assets and liabilities translated at end of the period exchange rates. At December 31, 2006, the accumulated other comprehensive earnings related to foreign currency translations was approximately $0.2 million. Foreign currency transaction gains and (losses) are included in the results of operations and are not material.

Item 8. Financial Statements and Supplementary Data.

INDEX TO FINANCIAL STATEMENTS

REPORT OF MANAGEMENT

Management's Report on Financial Statements

Our management is responsible for the preparation, integrity and fair presentation of information in our consolidated financial statements, including estimates and judgments. The consolidated financial statements presented in this report have been prepared in accordance with accounting principles generally accepted in the United States of America. Our management believes the consolidated financial statements and other financial information included in this report fairly present, in all material respects, our consolidated financial condition, consolidated results of operations and consolidated cash flows as of and for the periods presented in this report. The consolidated financial statements have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is included herein.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting. Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Our internal control over financial reporting includes those policies and procedures that:

·   pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;

·   provide reasonable assurance that our transactions are recorded as necessary to permit preparation of our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our directors; and

·   provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements.

Our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Our system contains self monitoring mechanisms, and actions are taken to correct deficiencies as they are identified.

Our management conducted an evaluation of the effectiveness of the system of internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Our assessment excludes the Adheris, JSAI, Synergos, MedConference and DialogCoach businesses we acquired in 2006 as allowed under the rules and clarifications provided by the Securities and Exchange Commission and the Public Company Accounting Oversight Board (United States). The financial statements of these acquired businesses constitute 8% and 15% of revenues and total assets, respectively, of the consolidated financial statement amounts as of and for the year ended December 31, 2006. Based on this evaluation, our management concluded that our system of internal control over financial reporting was effective as of December 31, 2006. Our management's assessment of the effectiveness of our internal control over financial reporting has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included herein.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders of inVentiv Health, Inc.

Somerset, New Jersey

We have audited the accompanying consolidated balance sheets of inVentiv Health, Inc. and subsidiaries (the "Company") as of December 31, 2006 and 2005, and the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2006. Our audits also included the financial statement schedules listed in the Index at Item 15 (a). We also have audited management's assessment, included in the accompanying Management's Report on Internal Control Over Financial Reporting, that the Company maintained effective internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As described in Management's Report on Internal Control Over Financial Reporting, management excluded from their assessment the internal control over financial reporting at Adheris, JSAI, Synergos, MedConference and DialogCoach, which were acquired in 2006, and whose financial statements reflect total assets and revenues constituting 15% and 8% of the related consolidated financial statement amounts as of and for the year ended December 31, 2006. Accordingly, our audit did not include the internal control over financial reporting at the aforementioned Adheris, JSAI, Synergos, MedConference and DialogCoach. The Company's management is responsible for these consolidated financial statements and financial statement schedules, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule, an opinion on management's assessment, and an opinion on the effectiveness of the Company's internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audit of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall consolidated financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, evaluating management's assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of inVentiv Health, Inc. as of December 31, 2006 and 2005, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2006, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. Also, in our opinion, management's assessment that the Company maintained effective internal control over financial reporting as of December 31, 2006, is fairly stated, in all material respects, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

As discussed in Note 2 to the financial statements, in 2006 the Company changed its method of accounting for stock compensation to conform to Statement of Financial Accounting Standards No. 123 (revised 2004) Share Base Payment.

/s/ Deloitte & Touche LLP

Parsippany, New Jersey

February 27, 2007

INVENTIV HEALTH, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

	December 31,
		2006			2005
ASSETS
Current assets:
Cash and equivalents	$	79,835		$	73,102
Restricted cash		50			3,878
Accounts receivable, net of allowances for doubtful accounts of $3,583 and $3,979 at
December 31, 2006 and 2005, respectively		124,283			112,782
Unbilled services		75,691			41,206
Prepaid expenses and other current assets		8,524			5,737
Current deferred tax assets		834			4,029
Total current assets		289,217			240,734
Property and equipment, net		43,380			36,637
Equity investments		5,076			5,183
Goodwill		266,827			173,777
Other intangibles, net		152,637			117,606
Deferred tax assets		--			3,428
Deposits and other assets		13,917			6,529
Total assets	$	771,054		$	583,894
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of capital lease obligations	$	11,708		$	10,859
Current portion of long-term debt		1,667			1,750
Accrued payroll, accounts payable and accrued expenses		123,175			77,816
Current income tax liabilities		1,475			7,359
Client advances and unearned revenue		64,508			29,393
Total current liabilities		202,533			127,177
Capital lease obligations, net of current portion		21,800			17,695
Long-term debt		162,917			172,813
Deferred tax liabilities		6,756			--
Other non-current liabilities		18,471			12,994
Total liabilities		412,477			330,679
Commitments and contingencies
Minority interests		115			(4	)
Stockholders’ Equity:
Preferred stock, $.001 par value, 10,000,000 shares authorized, none issued and outstanding at
December 31, 2006 and 2005, respectively		--			--
Common stock, $.001 par value, 50,000,000 shares authorized; 29,975,710 and 27,862,436
Shares issued and outstanding at December 31, 2006 and 2005, respectively		30			28
Additional paid-in-capital		284,331			233,441
Deferred compensation		--			(3,563	)
Accumulated other comprehensive (losses) income		(226	)		221
Accumulated earnings		74,327			23,092
Total stockholders’ equity		358,462			253,219
Total liabilities and stockholders’ equity	$	771,054		$	583,894

The accompanying notes are an integral part of these consolidated financial statements.

INVENTIV HEALTH, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

	For the Years Ended December 31,
		2006			2005			2004
Net Revenues	$	631,620		$	467,013		$	312,892
Reimbursable out-of-pockets		134,625			89,299			39,292
Revenues		766,245			556,312			352,184
Operating expenses:
Cost of services		410,184			327,648			241,468
Reimbursed out-of-pocket expenses		136,565			89,377			38,265
Selling, general and administrative expenses		141,418			79,313			38,539
Other operating income		--			--			(264	)
Total operating expenses		688,167			496,338			318,008
Operating income		78,078			59,974			34,176
Interest expense		(11,361	)		(3,955	)		(922	)
Interest income		2,694			1,409			678
Income from continuing operations before income tax provision, minority interest in income of subsidiary and income from equity investments		69,411			57,428			33,932
Income tax provision		(19,166	)		(14,229	)		(3,802	)
Income from continuing operations before minority interest in income of subsidiary and income from equity investments		50,245			43,199			30,130
Minority interest in income of subsidiaries		(1,207	)		(224	)		--
Equity earnings in investments		160			107			--
Income from continuing operations		49,198			43,082			30,130
Income from discontinued operations:
Gains on disposals of discontinued operations, net of tax benefit (expense) of $749, ($442) and ($547) for the years ended December 31, 2006, 2005 and 2004, respectively		2,037			781			1,002
Income from discontinued operations		2,037			781			1,002
Net income	$	51,235		$	43,863		$	31,132
Earnings per share:
Continuing operations:
Basic	$	1.69		$	1.60		$	1.26
Diluted	$	1.64		$	1.53		$	1.18
Discontinued operations:
Basic	$	0.07		$	0.03		$	0.04
Diluted	$	0.06		$	0.03		$	0.04
Net income:
Basic	$	1.76		$	1.63		$	1.30
Diluted	$	1.70		$	1.56		$	1.22
Weighted average common shares outstanding:
Basic		29,159			26,875			23,951
Diluted		30,058			28,165			25,437

The accompanying notes are an integral part of these consolidated financial statements.

INVENTIV HEALTH, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

For the years ended December 31, 2006, 2005 and 2004

(in thousands)

	Common Stock		Additional Paid-In Capital			Accumulatedearnings (deficit)			Deferred Compen- sation			Compre-hensive Income (Losses)			Accumulated Other Comprehen-sive Income (Losses)			Total
Balance at January 1, 2004	$	23	$	159,359		$	(51,675	)	$	(85	)				$	103			107,725
Net income		--		--			31,132			--		$	31,132			--			31,132
Foreign currency translation adjustment		--		--			--			--			217			217			217
												$	31,349
Vesting of restricted shares		--		--			--			64						--			64
Compensation expense		--		74			--			--						--			74
Exercise of stock options		2		3,196			--			--						--			3,198
Issuance of restricted shares		--		399			--			(399	)					--			--
Tax benefit from exercise of employee stock options and vesting of restricted stock		--		4,493			--			--						--			4,493
Issuance of shares in connection with acquisitions		1		25,540			--			--						--			25,541
Balance at December 31, 2004		26		193,061			(20,543	)		(420	)					320			172,444
Net income		--		--			43,863			--		$	43,863			--			43,863
Foreign currency translation adjustment		--		--			--			--			(99	)		(99	)		(99	)
												$	43,764
Vesting of restricted shares		--		--			--			694						--			694
Compensation expense		--		435			--			--						--			435
Exercise of stock options		1		6,831			--			--						--			6,832
Issuance of restricted shares		--		3,858			--			(3,858	)					--			--
Cancellation of restricted shares		--		(21	)		--			21						--			--
Tax benefit from exercise of employee stock options and vesting of restricted stock		--		9,772			--			--						--			9,772
Issuance of shares in connection with acquisitions		1		19,505			--			--						--			19,506
Cash distribution TSP		--		--			(228	)		--						--			(228	)
Balance at December 31, 2005		28		233,441			23,092			(3,563	)					221			253,219
Net income		--		--			51,235			--		$	51,235			--			51,235
Foreign currency translation adjustment		--		--			--			--			225			225			225
Net change in effective portion of derivative, net of taxes		--		--			--			--			(672	)		(672	)		(672	)
												$	50,788
Reclassification of unvested restricted shares to additional paid in capital		--		(3,563	)		--			3,563						--			--
Vesting of restricted shares		--		3,089			--			--						--			3,089
Withhold shares for taxes		--		(190	)		--			--						--			(190	)
Consultant compensation		--		728			--			--						--			728
Exercise of stock options		1		6,525			--			--						--			6,526
Stock option expense		--		4,450			--			--						--			4,450
Tax benefit from exercise of employee stock options and vesting of restricted stock		--		8,959			--			--						--			8,959
Issuance of shares in connection with acquisitions		1		30,892			--			--						--			30,893
Balance at December 31, 2006	$	30	$	284,331		$	74,327		$	--					$	(226	)	$	358,462

The accompanying notes are an integral part of these consolidated financial statements.

INVENTIV HEALTH, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	For the Years Ended December 31,
		2006			2005			2004
Cash flows from operating activities:
Net income	$	51,235		$	43,863		$	31,132
Income from discontinued operations		(2,037	)		(781	)		(1,002	)
Income from continuing operations		49,198		$	43,082		$	30,130
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		15,130			15,491			15,602
Amortization		5,610			1,934			306
Earnings of equity investments		(160	)		(107	)		--
Minority interest in income of subsidiary		1,207			224			--
Fair market value adjustment on derivative financial instrument		(2,069	)		(269	)		--
Deferred taxes		13,379			4,352			(4,711	)
Stock compensation expense		7,539			694			138
Tax benefit from stock option exercises and vesting of restricted shares		9,831			9,772			4,493
Changes in assets and liabilities, net of effects from discontinued operations:
Accounts receivable, net		2,257			(20,204	)		(1,186	)
Unbilled services		(32,576	)		10,348			(9,522	)
Prepaid expenses and other current assets		(197	)		6,521			(1,208	)
Accrued payroll, accounts payable and accrued expenses		7,154			(6,401	)		8,413
Current income tax liabilities		(6,754	)		(4,754	)		2,948
Client advances and unearned revenue		21,715			(8,186	)		4,286
Excess tax benefits from stock based compensation		(8,641	)		--			--
Other		2,403			3,757			397
Net cash provided by continuing operations		85,026			56,254			50,086
Net cash provided by (used in) discontinued operations		624			(951	)		(1,125	)
Net cash provided by operating activities		85,650			55,303			48,961
Cash flows from investing activities:
Restricted cash balances		3,828			(1,332	)		(816	)
Investment in cash value of life insurance policies		(2,911	)		(1,382	)		--
Cash paid for acquisitions, net of cash acquired		(61,461	)		(187,002	)		(44,943	)
Acquisition earn-out payments		(8,267	)		(5,181	)		--
Equity investments		267			(115	)		--
Purchases of property and equipment		(6,704	)		(5,936	)		(5,697	)
Proceeds from manufacturers rebates on leased vehicles		3,630			3,093			3,799
Net cash used in continuing operations		(71,618	)		(197,855	)		(47,657	)
Net cash provided by discontinued operations		1,413			1,732			2,141
Net cash (used in) provided by investing activities		(70,205	)		(196,123	)		(45,516	)
Cash flows from financing activities:
Borrowings on credit agreement		--			175,000			--
Repayments on credit agreement		(9,979	)		(437	)		--
Repayments of capital lease obligations		(12,948	)		(14,624	)		(11,021	)
Fees to establish credit agreement		--			(3,330	)		--
Withholding shares for taxes		(190	)		--			--
Proceeds from exercise of stock options		6,525			6,831			3,198
Excess tax benefits from stock-based compensation		8,641			--			--
Distributions to minority interests in affiliated partnership		(1,087	)		(228	)		--
Net cash (used in) provided by continuing operations		(9,038	)		163,212			(7,823	)
Net cash provided by discontinued operations		--			--			--
Net cash (used in) provided by financing activities		(9,038	)		163,212			(7,823	)
Effect of exchange rate changes		326			(99	)		217
Net increase (decrease) in cash and equivalents		6,733			22,293			(4,161	)
Cash and equivalents, beginning of year		73,102			50,809			54,970
Cash and equivalents, end of year	$	79,835		$	73,102		$	50,809
Supplemental disclosures of cash flow information:
Cash paid for interest	$	12,798		$	4,090		$	857
Cash paid for income taxes	$	8,077		$	5,296		$	1,641
Supplemental disclosure of non-cash activities:
Vehicles acquired through capital lease agreements	$	21,871		$	10,845		$	16,581
Stock issuance related to acquisitions	$	30,893		$	19,506		$	25,541

(1)   See footnote 2 for further details.

The accompanying notes are an integral part of these consolidated financial statements.

INVENTIV HEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Business:

inVentiv Health Inc. (together with its subsidiaries, “inVentiv”, or the “Company”, formerly Ventiv Health, Inc.) is a leading provider of value-added services to the pharmaceutical and life sciences industries. The Company supports a broad range of clinical development, communications and commercialization activities that are critical to its customers' ability to complete the development of new drug products and medical devices and successfully bring them to market. The Company’s goal is to assist its customers in meeting their objectives in each of its operational areas by providing our services on a flexible and cost-effective basis that permits the Company to provide discrete service offerings in focused areas as well as integrated multidisciplinary solutions. The Company provides services to over 200 client organizations, including all top 20 global pharmaceutical companies and numerous emerging and specialty biotechnology companies.

The Company’s service offerings reflect the changing needs of its clients as their products move through the late-stage development and regulatory approval processes and into product launch. The Company has established expertise and leadership in providing the services its clients require at each of these stages of product development and commercialization and seek to address their outsourced service needs on a comprehensive basis throughout the product life cycle through both standalone and integrated solutions.

On June 14, 2006, the Company changed its name to inVentiv Health, Inc. as part of a re-branding initiative that began when the Company acquired inVentiv Communications, Inc. (then known as inChord Communications, Inc.) (“inVentiv Communications, Inc.” or "inChord"), a healthcare marketing and communications company.

Business Segments

The Company currently serves its clients primarily through three business segments, which correspond to its reporting segments for 2006:

·   inVentiv Clinical, which provides services related to permanent placement, clinical staffing, data collection and management and functional outsourcing. This segment includes the Smith Hanley group of companies (which includes Smith Hanley Associates, Smith Hanley Consulting Group and MedFocus) and HHI Clinical & Statistical Research Services (“HHI”), which the Company acquired during the fourth quarter of 2004, and Synergos, LLP ("Synergos"), a clinical services provider with expertise in clinical trial management services, which the Company acquired in the second quarter of 2006.

·   inVentiv Communications, which provides services related to pharmaceutical advertising, branding, interactive communication development and patient and physician education. This segment includes inVentiv Communications, Inc., Adheris, Inc. ("Adheris"), a patient compliance and persistence communications company, which the Company acquired in the first quarter of 2006, and Jeffrey Simbrow Associates ("JSAI"), a leading healthcare marketing and communications agency, which the Company acquired in the second quarter of 2006, as more fully discussed below.

·   inVentiv Commercial, which consists of the Company’s outsourced sales and marketing teams, planning and analytics services, sample accountability and patient assistance businesses, marketing support services, professional development and training, and recruitment of sales representatives in the commercial services area. This segment includes inVentiv Pharma Teams, inVentiv Analytics and inVentiv Pharma Solutions.

The Company’s services are designed to develop, execute and monitor strategic and tactical sales and marketing plans and programs for the promotion of pharmaceutical, biotechnology and other life sciences products.

2. Summary of Significant Accounting Policies:

Basis of Presentation

The consolidated financial statements include the accounts of inVentiv Health, Inc., its wholly owned subsidiaries and its 53% owned subsidiary, Taylor Search Partners (“TSP”), which was acquired in conjunction with the acquisition of inVentiv Communications, Inc. Our continuing operations consist primarily of three business segments: inVentiv Clinical, inVentiv Communications and inVentiv Commercial. All significant intercompany transactions have been eliminated in consolidation.

As a result of the acquisition of inVentiv Communications, Inc., the Company has a 15% ownership interest in Heart Reklambyra AB (“Heart”), an advertising agency located in Sweden and a 44% interest in Angela Liedler GmbH (“Liedler”), a service provider of communication and marketing tools for technical, medical and pharmaceutical products, located in Germany. Both of these investments are accounted for by using the equity method of accounting.

In December 2005, the Company entered into an exclusive joint venture agreement with SIRO Clinpharm Pvt. Ltd., India's largest domestic contract research organization, to offer pharmaceutical companies India-based clinical data management services. This project is in the development stage and has not commenced providing client services.

Cash and Equivalents

Cash and equivalents are comprised principally of amounts in operating accounts, money market investments and other short-term instruments. These accounts are stated at cost, which approximates market value, and have original maturities of three months or less. See footnote 5 for a description of restricted cash balances.

Revenue Recognition

The following is a summary of the Company’s revenue recognition policy, based on the segment and services the Company provides:

inVentiv Clinical

·   Clinical Staffing and Recruiting- Revenues are recognized and recorded when services are rendered.

·   Functional Outsourcing- Revenues are recognized and recorded when milestones are achieved, in accordance with the terms of the contracts.

·   Executive Placement- Revenues are recognized and recorded at the time a candidate begins full-time employment. Any write-offs due to cancellations and/or billing adjustments historically have been insignificant.

inVentiv Communications

·   Advertising and Communication support- Revenues are recognized and recorded under the proportional performance method, by relating the actual hours of work performed to date to the current estimated total hours of the respective projects. Any anticipated losses on projects are recognized when such losses are anticipated. Time and production billings are billed as incurred for actual time and expenses.

·   Branding Consultation- Revenues are recognized and recorded on a fee for service basis, in accordance with the terms of the contracts.

INVENTIV HEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

·   Patient and Physician Education- Revenues are recognized and recorded using either the completed contract method or when milestones are achieved, depending on the terms of the specific contracts.

·   Interactive Communication Development- Revenues are recognized and recorded as time and production billings are billed as incurred for actual time and expenses.

inVentiv Commercial

·   Sales and Marketing Teams- Revenues and associated costs are recognized and recorded under pharmaceutical detailing contracts based on the number of physician calls made or the number of sales representatives utilized. Most of our Sales and Marketing Teams’ contracts involve two phases, a “deployment phase”, typically three months, in which the Company performs initial recruiting, training and preparation for deployment of the field force at the start of a new contract, and the “Promotion phase” in which our deployed field force actively promotes specified products for clients through face-to-face interactions with physicians referred to as “detailing”.

Our inVentiv Pharma Teams contracts specify a separate fee for the initial “deployment phase” of a project. The Company considers the deployment phase to be a separate and distinct earnings process and recognize the related revenues throughout the deployment phase, which typically spans a period of two to three months at the beginning of the first year of a contract. The Company generally recognizes revenue during the “promotion phase” of our inVentiv Pharma Teams contracts on a straight-line basis based on the size of the deployed field force. The accounting for the two phases is based on our analysis of Emerging Issues Task Force (“EITF”) Issue No. 00-21, Revenue Arrangements with Multiple Deliverables, in which the Company has concluded that the deployment and promotion phases are being sold separately and therefore qualify as separate units of accounting within the meaning of paragraph 9 of EITF 00-21.

Many of the product detailing contracts allow for additional periodic incentive fees to be earned once agreed upon performance benchmarks have been attained. Revenue from incentive fees is recognized and recorded when the Company is reasonably assured that payment will be made, and is typically based upon verification through calculation of achievement, third party data or client verification. Many contracts also stipulate penalties if agreed upon performance benchmarks have not been met. These penalties are recognized upon verification of performance shortfalls.

Non-refundable conversion fees are recognized and recorded as revenue when one of our sales professionals accepts a firm offer of permanent employment from a customer during the term of a contract.

·   Planning and Analytics- Revenues for HPR generally include fixed fees, which are recognized and recorded when monthly services are performed based on the proportional performance method and when payment is reasonably assured. HPR’s initial contracts typically range from one month to one year. Revenues for additional services are recognized and recorded when the services are provided and payment is reasonably assured.

·   Regulatory Compliance and Patient Assistance- Regulatory compliance revenues for both fixed fees services and fees for specific compliance related services are recognized and recorded when monthly services are performed. Patient assistance programs revenues depend on the number of patients served and are recognized and recorded as each service is performed.

·   Marketing Support Services- Revenues are recognized and recorded based on time incurred and fulfillment requirements in accordance with the terms of the contracts .

·   Professional Development and Training- Revenues are generally recognized and recorded as training courses are completed.

General Revenue Recognition

Reimbursable Costs

Reimbursable costs, including those relating to travel and out-of pocket expenses, sales force bonuses tied to individual or product revenues, and other similar costs, are generally included in revenues, and an equivalent amount of reimbursable expenses is included in costs of services in the period in which such amounts have been finalized. In certain cases, based on the Company’s analysis of EITF Issue No. 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent, and related accounting literature, the Company may also record certain reimbursable transactions, such as the placement of media advertisements where the Company acts as an agent, as net revenues.

Loss Contracts

The Company periodically analyzes its contracts to determine the likelihood and amount of any potential loss on a contract resulting from lower than anticipated product, field force or other performance. In the event that current information illustrates a loss is likely to be incurred over the remaining life of the contract, the Company accrues that loss at the time it becomes probable. The Company did not have any material loss contracts in 2006, 2005 or 2004.

Billing

Customers are invoiced according to agreed upon billing terms. Contracts that are invoiced prior to performance of related services are recorded as client advances and unearned revenue and are not recognized as revenues until earned, in accordance with our revenue recognition policies. Amounts earned for revenues recognized before the agreed upon billing terms have been met are recorded as revenue and included in unbilled services. Upon billing, these amounts are transferred to billed accounts receivable.

Receivables

Receivables consist of amounts billed and currently due from customers and unbilled amounts which have been earned but not yet billed. With the exception of amounts relating to certain contracts with pre-determined billing intervals, all amounts that are unbilled at the end of each monthly period are billed during the immediately succeeding monthly period.

Property and Equipment

Property and equipment is stated at cost. The Company depreciates furniture, fixtures and office equipment on a straight-line basis over three to seven years; computer equipment over two to five years; leasehold improvements over the shorter of the term of the lease or the estimated useful lives of the improvements. The Company amortizes the cost of vehicles under capital leases on a straight-line basis over the term of the lease.

 Goodwill and Other Intangible Assets

Goodwill and other indefinite-life intangibles are assessed for potential impairment pursuant to the guidelines of Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets,on an annual basis (at June 30) or when management determines that the carrying value of goodwill or an indefinite-lived intangible asset may not be recoverable based upon the existence of certain indicators of impairment. Goodwill is tested for impairment at least annually using a two-step process that begins with an estimation of the fair value of a reporting unit. The first step screens for potential impairment, and the second step measures the amount of impairment, if any. The Company calculates the fair value of the goodwill and indefinite-lived intangible asset and compares this to its carrying value. If the carrying value exceeds the fair value, an impairment loss will be recognized in an amount equal to the difference. If the Company deems the useful life to be no longer indefinite after testing for impairment in accordance with the applicable rules stated above, the Company amortizes the intangible asset over its remaining estimated useful life, following the pattern in which the expected benefits will be consumed or otherwise used up and the Company continues to review for impairment on an annual basis.

The Company performed annual impairment tests as of June 2006 and concluded that the existing goodwill and indefinite lived intangible tradename balances were not impaired and continue to maintain this position as of December 31, 2006, based on various factors, including updated forecasts and the current condition of the Company. As of December 31, 2006, the Company had goodwill of approximately $266.8 million and other intangibles (net) of $152.6 million in the Consolidated Balance Sheet.

INVENTIV HEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Impairment of Long-Lived Assets

SFAS No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets,establishes accounting standards for the impairment of long-lived assets. The Company reviews its long-lived assets, including property and equipment, for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Events or circumstances that would result in an impairment review primarily include operations reporting sustained losses or a significant change in the use of an asset. An impairment loss would be recognized based on the amount by which the carrying value of the asset exceeds its fair value. There were no material impairment losses in 2006, 2005 or 2004.

Claims and Insurance Accruals

 The Company maintains self-insured retention limits for certain insurance policies. The liabilities associated with the risk retained by us are estimated in part based on historical experience, third-party actuarial analysis, demographics, nature and severity, past experience and other assumptions. The liabilities for self-funded retention are included in claims and insurance reserves based on claims incurred, with liabilities for unsettled claims and claims incurred but not yet reported being actuarially determined with respect to workers’ compensation and auto liability claims and with respect to all other liabilities, estimated based on management’s evaluation of the nature and severity of individual claims and historical experience. However, these estimated accruals could be significantly affected if the Company’s actual costs differ from these assumptions. A significant number of these claims typically take several years to develop and even longer to ultimately settle. These estimates tend to be reasonably accurate over time; however, assumptions regarding severity of claims, medical cost inflation, as well as specific case facts can create short-term volatility in estimates.

Earnings Per Share (“EPS”)

 Basic net earnings per share excludes the effect of potentially dilutive securities and is computed by dividing earnings attributable to common shareholders by the weighted average number of common shares outstanding during the period.  Diluted earnings per share reflect the potential dilution that could occur if securities or other instruments to issue common stock were exercised or converted into common stock. Potentially dilutive securities are excluded from the computation of diluted earnings per share when their inclusion would be antidilutive. A summary of the computation of basic and diluted earnings per share from continuing operations is as follows:

	Year Ended December 31,
		2006		2005		2004
	(in thousands, except per share data)
Basic EPS from Continuing Operations Computation
Income from continuing operations	$	49,198	$	43,082	$	30,130
Weighted average number of common shares outstanding		29,159		26,875		23,951
Basic EPS from continuing operations	$	1.69	$	1.60	$	1.26
Diluted EPS from Continuing Operations Computation
Income from continuing operations	$	49,198	$	43,082	$	30,130
Adjustments		--		--		--
Adjusted income from continuing operations	$	49,198	$	43,082	$	30,130
Weighted average number of common shares outstanding		29,159		26,875		23,951
Stock options (1)		780		1,265		1,482
Restricted awards (2)		119		25		4
Total diluted common shares outstanding		30,058		28,165		25,437
Diluted EPS from continuing operations	$	1.64	$	1.53	$	1.18

(1)   For the years ended December 31, 2006, December 31, 2005 and December 31, 2004, 362,479 shares, 55,911 shares, and 377,121 shares, respectively, were excluded from the calculation of diluted EPS due to the fact that the shares are considered anti-dilutive because the number of potential buyback shares is greater than the number of weighted shares outstanding.

(2)   For the years ended December 31, 2006, December 31, 2005 and December 31, 2004, 7,336 shares and 9,770 shares, and 3,826 shares, respectively, were excluded from the calculation of diluted EPS due to the fact that the shares are considered anti-dilutive because the number of potential buyback shares is greater than the number of weighted shares outstanding.

Income Taxes

Deferred tax assets and liabilities are determined based on the difference between the financial reporting and the tax bases of assets and liabilities and are measured using the tax rates and laws that are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.A valuation allowance is established, when necessary, to reduce deferred income tax assets to the amount that is more likely than not to be realized. Realization is dependent on generating sufficient taxable income of a specific nature prior to the expiration of any loss carryforwards or capital losses. The asset may be reduced if estimates of future taxable income during the carryforward period are reduced. In addition, the Company maintains reserves for certain tax items, which are included in income taxes payable on its consolidated balance sheet. The Company periodically reviews these reserves to determine if adjustments to these balances are necessary.

Foreign Currency Translations

The Company is not currently affected by foreign currency exchange rate exposure, except for any fluctuations in the foreign bank accounts remaining from the divestitures of inVentiv’s European business units and our Canadian subsidiary, equity investments and minority interests in inVentiv Communications’ foreign business units, which are not material to its consolidated financial statements. The Company’s treatment of foreign subsidiaries is consistent with the guidelines set forth in SFAS 52, Foreign Currency Translations. The financial statements of the Company’s subsidiaries expressed in foreign currencies are translated from the respective functional currencies to U.S. Dollars, with results of operations and cash flows translated at average exchange rates during the period, and assets and liabilities translated at end of the period exchange rates. At December 31, 2006, the accumulated other comprehensive losses related to foreign currency translations was approximately $0.2 million. Foreign currency transaction gains and (losses) are included in the results of operations and are not material.

INVENTIV HEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Use of Estimates

 The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The consolidated financial statements include certain amounts that are based on management's best estimates and judgments.  Estimates are used in determining items such as revenue recognition, reserves for accounts receivable, certain assumptions related to goodwill and intangible assets, deferred tax valuation, claims and insurance accruals, derivative financial instruments, stock based compensation and amounts recorded for contingencies and other reserves.  Because of the uncertainty inherent in such estimates, actual results may differ from these estimates.  The Company is not aware of reasonably likely events or circumstances that would result in different amounts being reported that would have a material impact on its consolidated results of operations or consolidated financial condition.

Fair Value of Liquid Financial Instruments

 The carrying amount of our cash and cash equivalents, accounts receivable, unbilled services and accounts payable approximate fair value because of the relatively short maturity of these instruments.

Derivative Financial Instruments

 The Company enters into interest rate swap agreements to modify the interest rate characteristics of our outstanding long-term debt. At hedge inception, and at least quarterly thereafter, the Company assesses whether derivatives used to hedge transactions are highly effective in offsetting changes in the cash flow of the hedged item. To the extent the instruments are considered to be effective, changes in fair value are recorded as a component of other comprehensive income (loss). To the extent there is any hedge ineffectiveness, changes in fair value relating to the ineffective portion are immediately recognized in earnings (interest expense). The fair values of the Company’s interest rate swaps are obtained from dealer quotes. These values represent the estimated amount the Company would receive or pay to terminate the agreement taking into consideration the difference between the contract rate of interest and rates currently quoted for agreements of similar terms and maturities.

Concentration of Credit Risk

 Financial instruments that potentially subject us to concentration of credit risk consist of accounts receivable and unbilled services. The Company places its investments in highly rated financial institutions, U.S. Treasury bills, money market accounts, investment grade short-term debt instruments. The Company is subject to credit exposure to the extent the Company maintains cash balances at one institution in excess of the Federal Depository Insurance Company limit of $100,000. Its receivables are concentrated with its major pharmaceutical clients. The Company does not require collateral or other security to support clients' receivables.

Accounting for Stock Options

 The Financial Accounting Standards Board (“FASB”) revised SFAS No. 123 (“SFAS 123R”), Share-Based Payment, which establishes accounting for share-based awards exchanged for employee services and requires companies to expense the estimated fair value of these awards over the requisite employee service period. On April 14, 2005, the SEC adopted a new rule amending the effective dates for SFAS 123R. In accordance with the new rule, the Company adopted the accounting provisions of SFAS 123R as of January 1, 2006.

 On January 1, 2006, the Company adopted SFAS 123R using the modified prospective application method, as permitted under SFAS 123R, which requires measurement of compensation cost of all stock-based awards at fair value on the date of grant and recognition of compensation over the service periods for awards expected to vest. Under this method, compensation cost in 2006 includes the portion vesting in the period for (1) all stock-based awards granted prior to, but not vested as of, January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123, Accounting for Stock-Based Compensation (“SFAS 123”), and (2) all stock-based awards granted subsequent to January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS 123R. The Company will recognize the cost of all employee stock awards on a straight-line basis over their respective vesting periods, net of estimated forfeitures. Accordingly, prior periods amounts have not been restated. Under this method, the Company is required to record compensation expense for all awards granted after the date of adoption and for the unvested portion of previously granted awards that remain outstanding at the date of adoption.

The adoption of SFAS 123R resulted in incremental stock-based compensation expense of $7.5 million, of which $2.4 million was recorded in cost of services and $5.1 million recorded as Selling, General and Administrative expenses (“SG&A”) for the year ended December 31, 2006. The incremental stock-based compensation expense caused income before income tax provision, minority interest in income of subsidiary and income from equity investments to decrease by $7.5 million for the year ended December 31, 2006, respectively, net income to decrease by $4.5 million for the year ended December 31, 2006, and basic and diluted earnings per share to decrease by $0.15 per share for the year ended December 31, 2006. Cash from operating activities decreased and cash from financing activities increased by $8.6 million related to excess tax benefits from the exercise of stock-based awards.

On November 10, 2005, the FASB issued FASB Staff Position No. 123R-3, Transition Election Related to Accounting for Tax Effects of Share-Based Payment Awards. The Company has elected to adopt the alternative transition method provided in this FASB Staff Position for calculating the tax effects of share-based compensation pursuant to SFAS 123R. The alternative transition method includes a simplified method to establish the beginning balance of the additional paid-in capital pool (APIC pool) related to the tax effects of employee share-based compensation, which is available to absorb tax deficiencies recognized subsequent to the adoption of SFAS 123R.

In March 2005, the SEC issued SAB No. 107 (“SAB 107”) that provides additional guidance in applying the provisions of SFAS No. 123 (revised 2004), Share-Based Payment (“SFAS No. 123R”). SFAS No. 123R requires that compensation cost relating to share-based payment transactions be recognized in the financial statements based on the fair value of the equity or liability instruments issued. SFAS No. 123R covers a wide range of share-based compensation arrangements, including share options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. SAB 107 describes the SEC staff's expectations in determining the assumptions that underlie fair value estimates and discusses the interaction of SFAS No. 123R with certain existing SEC guidance. For the year ended December 31, 2006, the company has elected to use the simplified method of determining the expected term as permitted by SAB 107.

Pro forma Information for Periods Prior to the Adoption of SFAS 123R

Prior to the adoption of SFAS 123R, the Company applied Accounting Principles Board No. 25 (“APB 25”) to account for its stock-based awards. Under ABP 25, the Company only recorded stock-based compensation expense for restricted stock units. Under the provisions of APB 25, the Company was not required to recognize compensation expense for the cost of stock options issued under its equity compensation plans as all options were granted with an exercise price equal to the market value of the underlying common stock on the date of grant. In addition, forfeitures of awards were recognized as they occurred. The Company has not changed its valuation model used for estimating the fair value of options granted after January 1, 2006, from the Black-Scholes option-pricing model previously used for pro forma presentation purposes as required under SFAS 123, as amended by SFAS No. 148, Accounting for Stock-Based Compensation - Transition and Disclosures.

INVENTIV HEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table details the effect on net income and earnings per share had compensation expense for the employee stock-based awards been recorded based on the fair value method under SFAS 123:

	Years Ended December 31,
(in thousands, except per share data)		2005			2004
Net income attributable to common shareholders, as reported	$	43,863		$	31,132
Add: total stock-based compensation expense included in reported net income attributable to common shareholders, net of tax		422			39
Less: stock-based employee compensation expense determined under the fair value method, net of related income tax		(3,663	)		(2,637	)
Pro forma net earnings	$	40,622		$	28,534
As reported: Basic	$	1.63		$	1.30
As reported: Diluted	$	1.56		$	1.22
Pro forma: Basic	$	1.51		$	1.19
Pro forma: Diluted	$	1.44		$	1.12

Recent Accounting Pronouncements

 In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115. SFAS No. 159 provides companies with an option to report selected financial assets and liabilities at fair value. This statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions of FASB Statement No. 157, Fair Value Measurements. The Company has not yet determined the impact SFAS 159 will have on our consolidated balance sheets, results of operations or cash flows.

 In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements". SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of SFAS 157 are effective for the fiscal year beginning January 1, 2008. The Company has not yet determined the impact SFAS 157 will have on our consolidated balance sheets, results of operations or cash flows.

 In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin (“SAB”) No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Current Year Misstatements. SAB No. 108 requires analysis of misstatements using both an income statement (rollover) approach and a balance sheet (iron curtain) approach in assessing materiality and provides for a one-time cumulative effect transition adjustment. SAB No. 108 is effective for the Company’s 2006 annual financial statements. The adoption of SAB No. 108 did not have a material impact on our consolidated balance sheets, results of operations or cash flows.

 In July 2006, the FASB issued FASB Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109. FIN 48 clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the consolidated financial statements. FIN 48 also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 applies to all tax positions related to income taxes subject to FASB Statement No. 109, Accounting for Income Taxes (“FASB No. 109”). FIN 48 is effective for fiscal years beginning after December 15, 2006; as such, the Company will adopt FIN 48 as of January 1, 2007, as required. Differences between the amounts recognized in the consolidated financial statements prior to the adoption of FIN 48 and the amounts reported after adoption should be accounted for as a cumulative-effect adjustment recorded to the beginning balance of retained earnings. The Company evaluated the impact of the adoption of FIN 48 and does not expect it to have a material impact on our consolidated balance sheets, results of operations or cash flows, or other significant matters, such as debt covenants or the Company’s normal business practices.

 On November 10, 2005, the FASB issued Interpretation No. 45-3, Application of FASB Interpretation No. 45 to Minimum Revenue Guarantees Granted to a Business or Its Owners (“FIN 45-3”). FIN 45-3 amends FIN 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, to expand the scope to include guarantees granted to a business, such as a physician’s practice, or its owner(s), that the revenue of the business for a period will be at least a specified amount. Under FIN 45-3, the accounting requirements of FIN 45 are effective for any new revenue guarantees issued or modified on or after January 1, 2006 and the disclosure of all revenue guarantees, regardless of whether they were recognized under FIN 45, is required for all interim and annual periods beginning after January 1, 2006. The adoption of FIN 45-3 did not have a material impact on our consolidated balance sheets, results of operations or cash flows.

 In June 2005, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Account Standard (“SFAS”) No. 154, Accounting Changes and Error Corrections, (“SFAS No.154”) a replacement of Accounting Principles Board ("APB") Opinion No. 20, Accounting Changes, and Statement No. 3, Reporting Accounting Changes in Interim Financial Statements. SFAS No. 154 changes the requirements for the accounting for and the reporting of a change in accounting principle. Previously, most voluntary changes in accounting principles required recognition by recording a cumulative effect adjustment within net income in the period of change. SFAS No. 154 requires retrospective application to prior periods’ financial statements, unless it is impracticable to determine either the specific period effects or the cumulative effect of the change. SFAS No. 154 is effective for accounting changes made in fiscal years beginning after December 15, 2005. The implementation of SFAS No. 154 did not have a material impact on our consolidated balance sheets, results of operations or cash flows.

 In March 2005, the SEC issued Staff Accounting Bulletin No. 107 (“SAB 107”) that provides additional guidance in applying the provisions of SFAS No. 123 (revised 2004), Share-Based Payment (“SFAS No. 123R”). SFAS No. 123R requires that compensation cost relating to share-based payment transactions be recognized in the financial statements based on the fair value of the equity or liability instruments issued. SFAS No. 123R covers a wide range of share-based compensation arrangements, including share options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. SAB 107 describes the SEC staff's expectations in determining the assumptions that underlie fair value estimates and discusses the interaction of SFAS No. 123R with certain existing SEC guidance. The provisions of SAB 107 have been applied upon adoption of SFAS No. 123R. In April 2005, the SEC adopted a new rule that allows companies to implement SFAS No. 123R at the beginning of their next fiscal year, instead of the next reporting period that begins after June 15, 2005. As such, the Company was required to adopt SFAS No. 123R in the first quarter of 2006, beginning January 1, 2006. Under SFAS No. 123R, we must determine the appropriate fair value model to be used for valuing share-based payments, the amortization method for compensation cost and the transition method to be used at the date of adoption. The transition alternatives include prospective and retroactive adoption methods. Under the retroactive methods, prior periods may be restated either as of the beginning of the year of adoption or for all periods presented. The prospective method requires that compensation expense be recorded for all unvested stock options and share awards at the beginning of the first quarter of adoption of SFAS No. 123R, while the retroactive methods would record compensation expense for all unvested stock options and share awards beginning with the first period restated.

 In December 2004, the FASB issued SFAS No. 123R, which replaces SFAS No. 123, Accounting for Stock-Based Compensation (“SFAS No. 123”) and supercedes APB Opinion No. 25, Accounting for Stock Issued to Employees (“APB 25”). SFAS No. 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values, beginning with the first interim or annual period after December 31, 2005, with early adoption encouraged. In addition, SFAS No. 123R will cause unrecognized expense (based on the amounts in our pro forma footnote disclosure) related to options vesting after the date of initial adoption to be recognized as a charge to results of operations over the remaining vesting period.

3. Acquisitions:

Ignite - In February 2007, we signed a definitive agreement to acquire ignite comm.net and Incendia Health, Inc. (collectively, “Ignite”) for approximately $20.0 million in cash and stock, excluding post-closing adjustments and direct acquisition costs, which have yet to be finalized. We will be obligated to make certain earn-out payments, which may be material, contingent on Ignite's performance measurements during 2007 through 2009. Ignite is based in Irvine, California, and specializes in medical advertising and interactive communications targeting patients and caregivers. Ignite’s financial results were not included in the consolidated financial statements since the definitive agreement was signed after December 31, 2006. Ignite is expected to be included in the inVentiv Communications segment.

Chamberlain - In February 2007, we signed a definitive agreement to acquire Chamberlain Communications Group, Inc. (“Chamberlain”) for approximately $13.0 million in cash and stock, excluding post-closing adjustments and direct acquisition costs, which have yet to be finalized. We will be obligated to make certain earn-out payments, which may be material, contingent on Chamberlain's performance measurements during 2007 through 2009. Chamberlain is based in New York, and specializes in public relations in the healthcare industry. Chamberlain’s financial results were not included in the consolidated financial statements since the definitive agreement was signed after December 31, 2006. Chamberlain is expected to be included in the inVentiv Communications segment.

MedConference - In November 2006, the Company completed the acquisition of the net assets of The Maxwell Group, Inc. and its MedConference brand of services (“MedConference”) for approximately $8.1 million in cash and stock, including post-closing adjustments and direct acquisition costs, which have yet to be finalized. MedConference, based in Norristown, PA, was founded in 1989 and is a leading provider of live and on-demand virtual event services to the pharmaceutical industry. The Company will be obligated to make certain earn-out payments, which may be material, contingent on MedConference's performance measurements during 2006 through 2008. The amount due with respect to MedConference for 2006 is expected to be approximately $1.6 million in cash and stock, which the Company accrued at December 31, 2006, but is subject to review mechanisms set forth in the acquisition agreement and may change materially based on such review. The results of MedConference have been reflected in the inVentiv Commercial segment since the date of its acquisition. Pro forma financial information was not required to be disclosed under the Securities and Exchange Commission’s Regulation S-X because none of the specific thresholds were met for this acquisition as MedConference was not material to the consolidated operations of the Company.

INVENTIV HEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DialogCoach - In November 2006, the Company completed the acquisition of the net assets of ASERT LLC and DialogCoach LLC (collectively, “DialogCoach”) for approximately $5.7 million in cash and stock, including post-closing adjustments and direct acquisition costs, which have yet to be finalized. DialogCoach, based in Coopersburg, PA, is an education and training company focused on customized solutions in specialty markets and building training and educational programs. The Company will be obligated to make certain earn-out payments, which may be material, contingent on DialogCoach's performance measurements during 2006 through 2008. The results of DialogCoach have been reflected in the inVentiv Commercial segment since the date of its acquisition. Pro forma financial information was not required to be disclosed under the Securities and Exchange Commission’s Regulation S-X because none of the specific thresholds were met for this acquisition as DialogCoach was not material to the consolidated operations of the Company.

Synergos - In April 2006, the Company acquired the net assets of Synergos for approximately $6.4 million in cash and stock, including certain post-closing adjustments and direct acquisition costs. Synergos, based in The Woodlands, Texas, is a focused clinical services provider with expertise in clinical trial management services, particularly project management and monitoring, as well as investigator and patient recruitment. The Company will be obligated to make certain earn-out payments, which may be material, contingent on Synergos’s performance measurements during 2006 and 2007. The amount due with respect to Synergos for 2006 is expected to be approximately $0.8 million in cash and stock, which the Company accrued at December 31, 2006, but is subject to review mechanisms set forth in the acquisition agreement and may change materially based on such review. The results of Synergos have been reflected in the inVentiv Clinical segment from the date of its acquisition. Pro forma financial information was not required to be disclosed under the Securities and Exchange Commission’s Regulation S-X because none of the specific thresholds were met for this acquisition as Synergos was not material to the consolidated operations of the Company.

JSAI - In April 2006, the Company acquired JSAI for approximately $8.8 million in cash and stock, including certain post-closing adjustments and direct acquisition costs. JSAI is Canada's leading healthcare marketing and communications agency. The Company will be obligated to make certain earn-out payments, which may be material, contingent on JSAI’s performance measurements during the 12-month periods ending March 31, 2007, 2008 and 2009. The results of JSAI have been reflected in the inVentiv Communications segment from the date of its acquisition. Pro forma financial information was not required to be disclosed under the Securities and Exchange Commission’s Regulation S-X because none of the specific thresholds were met for this acquisition as JSAI was not material to the consolidated operations of the Company.

Adheris - In February 2006, the Company acquired Adheris for approximately $69.9 million in cash and stock, including certain post-closing adjustments and direct acquisition costs; the Company acquired approximately $10.1 million of net tangible assets in the transaction. Adheris is a Massachusetts-based industry leader in the area of patient compliance and persistency programs. The Company will be obligated to make certain earn-out payments, which may be material, contingent on Adheris's performance measurements during 2006 through 2008. The amount due with respect to Adheris for 2006 is expected to be approximately $7.9 million in cash and stock, which the Company accrued at December 31, 2006, but is subject to review mechanisms set forth in the acquisition agreement and may change materially based on such review. The results of Adheris have been reflected in the inVentiv Communications segment from the date of its acquisition. Pro forma financial information was not required to be disclosed under the Securities and Exchange Commission’s Regulation S-X because none of the specific thresholds were met for this acquisition as Adheris was not material to the consolidated operations of the Company.

inChord - In October 2005, the Company acquired all of the outstanding capital stock of inVentiv Communications, Inc. (then known as inChord Communications, Inc.) for approximately $196.8 million of cash and stock, including certain post-closing adjustments and direct acquisition costs; the Company acquired approximately $23.6 million of net tangible assets in the transaction. To help finance the transaction, the Company entered into a Credit Agreement, dated October 5, 2005, as more fully described in footnote 8. The Company acquired inVentiv Communications, Inc. to vastly expand its service portfolio in the marketing and communications arena, expand its market position in the pharmaceutical services market and achieve cross-selling opportunities by leveraging its existing businesses. The Company will be obligated to make certain earn-out payments, which may be material, contingent on inVentiv Communications, Inc.’s performance measurements from 2005 through 2007. inVentiv Communications, Inc.’s 2005 earnout of $3.8 million in cash and stock, of which $3.6 million was accrued at December 31, 2005, was paid in 2006. The portion adjusted in the subsequent year mainly relate to the finalization of the earn-outs for the previous year, as allowed under the contract. The amount due with respect to inVentiv Communications, Inc. for 2006 is expected to be approximately $25.0 million in cash and stock, which the Company accrued at December 31, 2006, but is subject to review mechanisms set forth in the acquisition agreement and may change materially based on such review. The results of inVentiv Communications, Inc. have been reflected in the inVentiv Communications segment since the date of acquisition. Pro forma financial information was disclosed as required under the Securities and Exchange Commission’s Regulation S-X as inChord was material to the consolidated operations of the Company.

PRS - In August 2005, the Company acquired the net assets of PRS, a provider of compliance management and marketing support services based in Horsham, Pennsylvania. PRS specializes in pharmaceutical sample management and compliance services; its operations are similar in nature to the business of Franklin Group, Inc. and Lincoln Ltd, Inc. (together, “Franklin”), which was acquired in June 2004. The closing consideration for the transaction was approximately $13.6 million in cash and stock (taking into account post-closing adjustments and direct acquisition costs); the Company acquired approximately $1.0 million of net assets in the transaction. The Company will be obligated to make certain earn-out payments, which may be material, contingent on PRS’s performance measurements in 2005 and 2006. The amount due with respect to PRS for 2005 was approximately $0.3 million, which was accrued for as of December 31, 2005 and paid in April 2006. The amount due with respect to PRS for 2006 is expected to be approximately $1.7 million in cash and stock, which the Company accrued at December 31, 2006, but is subject to review mechanisms set forth in the acquisition agreement and may change materially based on such review. The results of PRS have been reflected in the inVentiv Commercial segment since the date of acquisition. Pro forma financial information was not required to be disclosed under the Securities and Exchange Commission’s Regulation S-X because none of the specific thresholds were met for this acquisition as PRS was not material to the consolidated operations of the Company.

HHI - In November 2004, the Company acquired the net assets of HHI. HHI, based in Baltimore, Maryland, is a specialized statistical analysis and data management provider to the U.S. pharmaceutical industry. HHI complements the Smith Hanley business by offering clients the option of outsourced clinical support services as an alternative to internal staffing. The closing consideration for the transaction was approximately $6.2 million in cash and stock (taking into account post-closing adjustments and direct acquisition costs); the Company acquired approximately $0.8 million of net tangible assets in the transaction. The Company is obligated to make certain earn-out payments, which may be material, contingent on HHI’s performance measurements in 2005 and 2006. HHI’s 2005 earn-out was approximately $5.4 million, which $5.0 million was previously accrued for at December 31, 2005, and paid during the first quarter of 2006. The amount due with respect to HHI for 2006 is expected to be approximately $5.1 million in cash and stock, which the Company accrued at December 31, 2006, but is subject to review mechanisms set forth in the acquisition agreement and may change materially based on such review. The results of HHI have been reflected in the inVentiv Clinical segment since the date of acquisition.

Smith Hanley - In October 2004, the Company acquired the net assets of Smith Hanley. Smith Hanley specializes primarily in providing late-stage clinical staffing and recruiting services to the U.S. pharmaceutical industry. The Company acquired Smith Hanley to expand its service portfolio in the clinical services and recruitment areas, expand its market position in the pharmaceutical services market and achieve cross-selling opportunities by leveraging our existing sales force and relationships. The Company acquired approximately $9.5 million of net tangible assets for consideration of approximately $52.9 million in cash and stock (taking into account post-closing adjustments and direct acquisition costs) and was obligated to make certain earn-out payments, contingent on Smith Hanley’s performance measurements in 2004 and 2005. Smith Hanley’s 2004 earn-out paid in 2005 was approximately $6.6 million, for which $6.8 million was previously accrued for at December 31, 2004. Smith Hanley’s 2005 earn-out paid in 2006 was approximately $4.6 million, of which $4.0 million was previously accrued for at December 31, 2005. The portions adjusted in the subsequent years mainly relate to the finalization of the earn-outs for the respective years. The results of Smith Hanley have been reflected in the inVentiv Clinical segment since the date of acquisition.

Franklin - In June 2004, the Company acquired the net assets of Franklin, based in Somerville, New Jersey. Franklin specializes primarily in conducting patient assistance programs and pharmaceutical compliance services. The Company paid approximately $11.3 million in cash and stock (taking into account post-closing adjustments and direct acquisition costs) to acquire approximately $2.7 million of net tangible assets. The Company is obligated to make certain earn-out payments, which may be material, contingent on Franklin’s performance measurements during 2004 through 2006. Franklin’s 2004 earn-out paid in 2005 was approximately $1.8 million, $1.7 million of which was accrued for at December 31, 2004. Franklin’s 2005 earn-out paid in April 2006 was approximately $3.2 million, which was accrued for at December 31, 2005. The portions adjusted in the subsequent years mainly relate to the finalization of the earn-outs for the respective years. The amount due with respect to Franklin for 2006 is expected to be approximately $1.8 million in cash and stock, which the Company accrued at December 31, 2006, but is subject to review mechanisms set forth in the acquisition agreement and may change materially based on such review. Franklin’s financial results have been reflected in the inVentiv Commercial segment since the date of acquisition.

INVENTIV HEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of the purchase price consideration for the acquisitions is as follows:

2004 & 2005 Acquisitions

Purchase price consideration		Franklin		Smith Hanley		HHI		PRS		inChord
Cash *	$	6,667	$	30,000	$	5,000	$	9,100	$	172,500
Stock		3,580		21,215		747		4,105		12,145
Direct acquisition and other Post-closing adjustments		1,064		1,685		478		440		12,160
Contingent consideration for completed measurement periods		6,788		11,209		10,517		1,989		28,741
Total	$	18,099	$	64,109	$	16,742	$	15,634	$	225,546

* - Cash provided for the acquisition of inVentiv Communications, Inc. is pursuant to the credit agreement entered into on October 5, 2005.

2006 Acquisitions

Purchase price consideration		Adheris		JSAI		Synergos		MedConference		DialogCoach
Cash	$	45,349	$	6,903	$	4,000	$	4,900	$	3,500
Stock		14,617		1,684		1,929		2,168		1,548
Direct acquisition and other Post-closing adjustments		15,341		1,376		500		1,025		667
Contingent consideration for completed measurement periods		7,911		--		847		1,595		--
Total	$	83,218	$	9,963	$	7,276	$	9,688	$	5,715

The following represents the allocation of the purchase price to the acquired assets of the 2004, 2005 and 2006 acquisitions. The allocations are based upon the estimated fair value of the assets acquired and liabilities assumed as of the respective acquisition date.

Allocation of purchase price (2004-2005 acquisitions)		Franklin			Smith Hanley			HHI			PRS			inChord
Current assets	$	3,165		$	13,859		$	1,005		$	1,368		$	66,223
Property and equipment, and other noncurrent assets		432			670			48			183			13,533
Goodwill		12,856			37,237			14,317			10,798			107,670
Identifiable intangible assets		2,557			17,400			1,610			3,870			94,300
Liabilities assumed		(911	)		(5,057	)		(238	)		(585	)		(56,165	)
Minority interest		--			--			--			--			(15	)
Total	$	18,099		$	64,109		$	16,742		$	15,634		$	225,546

Allocation of purchase price (2006 acquisitions)		Adheris			JSAI			Synergos			MedConference			DialogCoach
Current assets	$	23,492		$	6,215		$	900		$	1,200		$	790
Property and equipment, and other noncurrent assets		810			558			49			238			--
Goodwill		44,937			5,257			4,186			5,571			3,398
Identifiable intangible assets		28,170			4,990			2,411			3,000			2,070
Liabilities assumed		(14,191	)		(7,057	)		(270	)		(321	)		(543	)
Total	$	83,218		$	9,963		$	7,276		$	9,688		$	5,715

 Goodwill represents the excess of the purchase price over the fair value of tangible and identifiable intangible assets. Goodwill and other intangible assets are more fully described in Footnote 7.

4. Significant Clients:

 During the year ended December 31, 2006, the Company had no clients that accounted for more than 10%, individually, of the Company's total revenues across our inVentiv Clinical, inVentiv Communications and inVentiv Commercial segments. During the year ended December 31, 2005, two clients accounted for approximately 14% and 11%, individually, of the Company’s total revenues spread across the inVentiv Commercial, inVentiv Communications and inVentiv Clinical segments. For the year ended December 31, 2004, two clients serving the inVentiv Commercial segment accounted for approximately 16% and 14%, individually, of the total revenues.

5. Restricted Cash:

 Restricted cash balances as of December 31, 2006 and 2005 were $0.1 million and $3.9 million, respectively. During the first two quarters of 2006, the Company replaced most of its existing letters of credit with letters of credit under UBS AG Stamford Branch. These letters of credit were previously cash collateralized for various obligations and represented cash restricted from use for general purposes as of December 31, 2005. The new letters of credit are no longer fully cash collateralized and do not represent restricted cash.

6. Property and Equipment, net:

Property and equipment consist of the following:

	As of December 31,
		2006			2005
(in thousands)
Land	$	---		$	---
Buildings and leasehold improvements		7,513			6,797
Computer equipment and software		23,061			18,036
Vehicles		35,965			34,525
Furniture and fixtures		4,743			4,031
		71,282			63,389
Accumulated depreciation		(27,902	)		(26,752	)
	$	43,380		$	36,637

 The vehicles have been recorded under the provisions of a capital lease. The inVentiv Commercial segment has entered into a lease agreement to provide fleets of automobiles for sales representatives for certain client engagements.

 Depreciation expense of property and equipment totaled $15.1 million, $15.5 million and $15.6 million in 2006, 2005 and 2004, respectively. In 2006, 2005, and 2004 inVentiv recorded $8.7 million, $10.5 million and $11.0 million of depreciation, respectively, on vehicles under capital lease.

INVENTIV HEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. Goodwill and Other Intangible Assets:

Goodwill consists of the following:

(in thousands)		January 1, 2006		Acquisitions		Contingent(1) Consideration		Other			December 31, 2006
inVentiv Clinical	$	45,427	$	3,340	$	6,975	$	--		$	55,742
inVentiv Communications		87,538		42,292		33,033		(5,000(2	))		157,863
inVentiv Commercial		40,812		7,375		5,035		--			53,222
Total	$	173,777	$	53,007	$	45,043	$	(5,000	)	$	266,827

(1)   The contingent consideration represents adjustments relating to the finalization of the 2005 earnouts as well as 2006 earnouts that are subject to finalization. (see Note 3 for further details).

(2)   The $5.0 million reduction of goodwill relates to amounts previously recorded as a liability of inVentiv Communications, Inc. prior to the acquisition by inVentiv. Prior to the acquisition, historical management of inVentiv Communications, Inc. recorded a liability of $7.5 million related to an acquisition-related incentive plan more fully discussed in Note 12. Certain provisions in the stock purchase agreement of inVentiv Communications, Inc. obligate the former sellers to reimburse the Company for the first $5 million of the payment of the acquisition-related incentive. As such, the amount has been adjusted to reclassify $5 million from Goodwill and Other Intangible Assets to Deposits and Other Assets in the Consolidated Balance Sheet as of December 31, 2006.

Other intangible assets consist of the following:

	December 31, 2006							December 31, 2005
(in thousands)				Accumulated							Accumulated
		Gross		Amortization			Net		Gross		Amortization			Net
Customer relationships	$	59,987	$	(7,240	)	$	52,747	$	37,787	$	(2,098	)	$	35,689
Noncompete agreement		880		(372	)		508		690		(103	)		587
Tradenames subject to amortization		911		(66	)		845		--		--			--
Other		2,600		(323	)		2,277		260		(190	)		70
Total definite-life intangibles		64,378		(8,001	)		56,377		38,737		(2,391	)		36,346
Tradenames not subject to amortization (1)		96,260		--			96,260		81,260		--			81,260
Total other intangibles (2)	$	160,638	$	(8,001	)	$	152,637	$	119,997	$	(2,391	)	$	117,606

(1)   These indefinite-life tradenames arose primarily from the acquisitions of Franklin, Smith Hanley, inChord and Adheris, where the brand names of the entities acquired are very strong and longstanding. These tradenames are also supported annually in the Company’s impairment test for goodwill and tradenames conducted in June of every year, as mentioned at the end of this note.

(2)   The $40.6 million increase in total gross other intangibles arises from the acquisitions of Adheris, JSAI, Synergos, MedConference and Dialog Coach.

The 2004, 2005 and 2006 business combinations discussed in footnote 3 above resulted in approximately $246.2 million of goodwill and the following gross intangible assets:

Intangible asset		Amount (in thousands)	Weighted average amortization period
Tradename	$	97,171	(1	)
Customer relationships		59,987	11.0 years
Noncompete agreement		880	4.1 years
Technology		2,340	7.2 years
Total	$	160,378	(2	)

(1)   $0.9 million of the tradenames are definite-life intangibles, which have a weighted average amortization period of 6 years.

(2)   Excludes $0.3 million of a definite-life intangible asset established prior to the 2004-2006 acquisitions.

Amortization expense, based on intangibles subject to amortization held at December 31, 2006, is expected to be $6.6 million in 2007, $6.5 million in 2008, $6.1 million in 2009, $5.7 million in 2010, $5.6 million in 2011 and $25.8 million thereafter.

As more fully described in footnote 2, the Company performed its annual impairment tests as of June 30, 2006 and concluded that the existing goodwill and indefinite lived intangible tradename balances were not impaired and continue to maintain this position as of December 31, 2006, based on various factors, including updated forecasts and the current condition of the Company.

8. Debt:

The Company’s principal external source of liquidity is its syndicated, secured credit agreement, which the Company entered into with UBS AG, Stamford Branch, and others in connection with the inVentiv Communications, Inc. acquisition. The key features of this credit facility are as follows:

·   A $175 million term loan facility was made available to us in a single drawing at the time of the inVentiv Communications, Inc. transaction. The credit agreement also includes a $50 million revolving credit facility, of which $5 million is available for the issuance of letters of credit, and a $5 million swingline facility.

·   The term loan will mature on the sixth anniversary of the Credit Agreement, with scheduled quarterly amortization of 1% per year during years one through five and 95% during year six. The revolving loans will mature on the sixth anniversary of the Credit Agreement.

·   Amounts advanced under the credit agreement must be prepaid with a percentage, determined based on a leverage test set forth in the credit agreement, of Excess Cash Flow (as defined in the credit agreement) and the proceeds of certain non-ordinary course asset sales and certain issuances of our debt obligations or equity securities, subject to certain exceptions. The Company may elect to prepay the loans, in whole or in part at any time, in certain minimum principal amounts, without penalty or premium (other than normal LIBOR break funding costs). Amounts borrowed under the credit agreement that are repaid or prepaid may not be reborrowed.

·   Interest on the loans accrue, at our election, at either (1) the Alternate Base Rate (which is the greater of UBS’s prime rate and federal funds effective rate plus 1/2 of 1%) or (2) the Adjusted LIBOR Rate, with interest periods determined at our option of 1, 2, 3 or 6 months (or, if the affected lenders agree, 9 months), in each case plus a spread based on the type of loan and method of interest rate determination elected.

·   The credit agreement contains, among other things, conditions precedent, representations and warranties, covenants and events of default customary for facilities of this type. Such covenants include certain limitations on indebtedness, liens, sale-leaseback transactions, guarantees, fundamental changes, dividends, acquisitions and transactions with affiliates. The credit agreement also includes covenants under which the Company is required to maintain a maximum leverage ratio and minimum interest rate coverage and fixed charge coverage ratios that vary based on the amount of time elapsed since the initial extension of credit. As of the date of this report, the Company complies with the requirements and covenants of its credit facility.

INVENTIV HEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The three-month LIBOR base rate as of December 31, 2006 and December 31, 2005 was 5.36% and 4.53%, respectively. As mentioned in footnote 11, the Company entered into a derivative financial instrument to hedge against this $175 million term loan facility.

During 2005, the Company incurred costs of approximately $3.3 million related to the credit agreement. These amounts are classified as deferred financing costs and $2.7 million and $3.2 million are included as Deposits and Other Assets on the December 31, 2006 and December 31, 2005 consolidated balance sheets, respectively. These deferred financing costs are amortized as interest expense over the life of the loan using the effective interest rate method. At December 31, 2006 and December 31, 2005, the Company had approximately $164.6 million and $174.6 million outstanding on the secured term loan and no amounts outstanding under the credit facility. The following table displays the required future commitment of the principal payment on the loan.

Years Ending December 31,
2007	$	1,667
2008		1,667
2009		1,667
2010		40,833
2011		118,750
Thereafter		--
Total minimum lease payments	$	164,584

9. Accrued Payroll, Accounts Payable and Accrued Expenses:

Accrued payroll, accounts payable and accrued expenses consist of the following:

	December 31,
		2006		2005
	(in thousands)
Accrued payroll and related employee benefits	$	28,411	$	24,236
Accounts payable		11,867		7,295
Accrued media liability		10,632		1,100
Accrued insurance		4,604		5,872
Accrued commissions		4,359		3,979
Accrued professional fees		2,597		2,441
Accrued meeting fees		1,154		1,511
Contingent consideration from acquisitions		44,049		16,120
Accrued expenses		15,502		15,262
	$	123,175	$	77,816

10. Leases:

The Company leases certain facilities, office equipment and other assets under non-cancelable operating leases. The operating leases are expensed on a straight-line basis and may include certain renewal options and escalation clauses.

The following is a schedule of future minimum lease payments for these operating leases at December 31, 2006 (in thousands):

Years Ending December 31,
2007	$15,638
2008	11,856
2009	9,294
2010	8,014
2011	7,436
Thereafter	13,094
Total minimum lease payments	$65,332

Rental expense charged to operations was approximately $8.7 million, 5.6 million, and $2.5 million for the years ended December 31, 2006, 2005 and 2004, respectively. In February 2003, the Company started to receive sublease payments for one of its facilities, which was formerly occupied by one of its divested units. In 2006, 2005 and 2004, approximately $1.5 million, $0.9 million and $0.9 million, respectively, of sublease income was received and offset against the obligation. The Company expects to collect for the year ending December 31, 2007, approximately $1.5 million, under the sublease agreement, and an additional $0.4 million through the contract expiration in March 2008.

The Company also has commitments under capital leases. The following is a schedule of future minimum lease payments for these capital leases at December 31, 2006 (in thousands):

	(a)
Years Ending December 31,
2007	$	13,692
2008		11,572
2009		8,613
2010		3,721
2011		3
Total minimum lease payments		37,601
Amount representing interest and management fees		(4,093	)
Current portion		(11,708	)
Non-current lease obligations	$	21,800

(a) These future commitments include interest and management fees, which are not recorded on the Consolidated Balance Sheet as of December 31, 2006 but will be recorded as incurred.

INVENTIV HEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. Derivative Financial Instruments:

 Effective October 2005, the Company entered into an amortizing three-year interest rate swap arrangement with a notional amount of $175 million at inception to apply a fixed interest rate against the six-year $175 million loan arrangement entered into to facilitate the acquisition of inVentiv Communications, Inc. The Company entered into this interest rate swap agreement to modify the interest rate characteristics of its outstanding long-term debt. At the inception of the hedged item’s designation, and at least quarterly thereafter, the Company assesses whether derivatives used to hedge transactions are highly effective in offsetting changes in the cash flow of the hedged item. To the extent the instruments are considered to be effective, changes in fair value are recorded as a component of other comprehensive income (loss). To the extent there is any hedge ineffectiveness, changes in fair value relating to the ineffective portion are immediately recognized in earnings (interest expense).

 From October 2005 to July 2006, the Company did not qualify for hedge accounting and recorded a $2.9 million reduction to interest expense relating to the mark-to-market adjustment, and a corresponding derivative asset of approximately $2.9 million, which was recorded in Deposits and Other Assets on the Consolidated Balance Sheet. The fair values of the interest rate swaps were obtained from dealer quotes. These values represent the estimated amount the Company would receive or pay to terminate the agreement taking into consideration the difference between the contract rate of interest and rates currently quoted for agreements of similar terms and maturities.

 On July 17, 2006, the Company formally designated the interest rate swap as a cash flow hedge pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. The Company employed the dollar offset method by performing a shock test to assess ineffectiveness and utilized the hypothetical derivative model to measure ineffectiveness. The hypothetical derivative contains the same terms and conditions as the original derivative, but was initiated in July 2006. From July 2006 to December 2006, the fair market value of the derivative asset decreased to approximately $1.1 million, resulting in a $1.8 million decrease in the derivative asset; approximately $1.2 million (approximately $0.7 million, net of taxes) adjustment to Other Comprehensive Income; and $0.6 million of interest expense due to ineffectiveness of the hedged item.

12. Commitments and Contingencies:

 The Company is subject to lawsuits, investigations and claims arising out of the conduct of its business, including those related to commercial transactions, contracts, government regulation and employment matters. Certain claims, suits and complaints have been filed or are pending against the Company.  We do not believe that any action will have a material adverse effect on our consolidated balance sheets, results of operations or cash flows.  The following action is pending against our Adheris business unit:

Utility Consumer Action Network v. Albertson’s Inc.(Case No. GIC 830069). This action was filed on May 17, 2004 in California Superior Court against Albertson’s Inc. three other drug store chains and 17 pharmaceutical companies alleging, among other things, violations of the California Unfair Competition Law and the California Confidentiality of Medical Information Act arising from the operation of manufacturer-sponsored, pharmacy-based compliance programs similar to Adheris's programs. The plaintiff is seeking "equitable monetary relief", disgorgement, statutory damages and penalties, injunctive relief and reimbursement of attorneys' fees in this lawsuit. An amended complaint was filed on November 4, 2004 naming Adheris as an additional defendant. Three demurrers are in the briefing stage and are expected to be ruled on shortly. Our insurer is defending this action under reservation of rights. We do not believe that this action will have a material adverse effect on our consolidated balance sheets, results of operations or cash flows.

 Pursuant to the acquisition of inChord, the Company assumed a $7.5 million existing incentive plan liability (out of a potential $15.0 million liability) on inChord’s balance sheet relating to certain performance thresholds of the segment over a three-year period from 2005 through 2007. The first $5.0 million of this obligation is to be paid by or for the account of the former shareholders of inChord; as such, this amount was recorded as a long-term receivable from the former shareholders. The Company has monitored these performance thresholds on a quarterly basis. At December 31, 2006, as a result of new business and the strengthened outlook for inChord’s business during 2007, management felt it was appropriate to record an additional $3.5 million (of which $1.2 million is recorded in cost of services and $2.3 million is recorded in SG&A) of the potential $15 million liability since the likelihood of achieving the next threshold is probable and the amount is estimable, pursuant to SFAS No. 5, Accounting for Contingencies. The Company will continue to monitor these performance thresholds, which may result in up to an additional $3.7 million of expenses, but currently the Company does not believe that it is probable that the final threshold will be met.

13. Common Stock and Stock Incentive Plans:

 As of June 14, 2006, the Company’s 2006 Long-Term Incentive Plan (“LTIP”) authorizes it to grant incentive stock options, nonqualified stock options, restricted stock awards, restricted stock units, stock appreciation rights ("SARs”) and performance awards. The aggregate number of shares of the Company’s common stock that may be issued under the Stock Plan upon exercise of options, SARs or in the form of restricted stock is 9.1 million shares. Prior to the adoption of the LTIP, the Company was authorized to grant equity incentive awards under its 1999 Stock Incentive Plan (together with the LTIP, the "Equity incentive Plans"), which was terminated at the time the LTIP was adopted.

 The exercise price of options granted under the LTIP may not be less than 100% of the fair market value per share of the Company’s common stock on the date of the option grant. The vesting and other provisions of the options are determined by the Compensation Committee of our Board of Directors.

 The following table summarizes activity under the Company’s equity incentive plan (in thousands, except per share amounts):

	Shares			Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2004	3,864		$	3.76
Granted and assumed	1,467			16.51
Exercised	(1,059	)		3.02
Forfeited/expired/cancelled	(64	)		3.63
Outstanding at December 31, 2004	4,208		$	8.39	6.70	$	50,149
Granted and assumed	175			24.41
Exercised	(1,282	)		5.33
Forfeited/expired/cancelled	(130	)		12.54
Outstanding at December 31, 2005	2,971		$	10.47	6.32	$	39,401
Granted and assumed	366			26.34
Exercised	(971	)		6.72
Forfeited/expired/cancelled	(172	)		14.75
Outstanding at December 31, 2006	2,194		$	14.43	7.24	$	45,900
Vested and expected to vest at December 31, 2006	2,116		$	14.15	7.19	$	44,847
Options exercisable at December 31, 2004	1,681		$	4.64	5.25	$	26,356
Options exercisable at December 31, 2005	1,470		$	7.82	5.43	$	23,239
Options exercisable at December 31, 2006	1,246		$	9.82	6.41	$	31,813

 The weighted-average grant-date fair value of stock options granted was $13.02, $13.24 and $10.95 at December 31, 2006, 2005 and 2004, respectively. The total intrinsic value of options exercised during the years ended December 31, 2006, 2005 and 2004, was $6.5 million, $6.8 million, and $3.2 million, respectively. As of December 31, 2006, there was approximately $8.9 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted; that cost is expected to be recognized over a weighted average of 2.4 years.

 The actual tax benefit realized for the tax deductions from option exercise of the share-based payment arrangements totaled $9.2 million, $9.7 million and $4.5 million for the years ended December 31, 2006, 2005 and 2004, respectively.

INVENTIV HEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Options outstanding and exercisable have exercise price ranges and weighted average remaining contractual lives of:

			Outstanding Options			Exercisable Options
Exercise Price Range			Numbers of Options	Weighted Average Exercise Price	Weighted Average Remaining Life (years)	Number of Options	Weighted Average Exercise Price
$1.48	To	$1.48	500	$1.48	5.85	500	$1.48
$1.66	To	$1.66	288,225	$1.66	5.95	288,225	$1.66
$1.72	To	$7.94	253,462	$4.50	5.39	237,812	$4.64
$8.06	To	$8.45	228,624	$8.28	5.07	178,562	$8.23
$9.15	To	$15.48	61,362	$12.95	7.22	18,888	$12.76
$15.96	To	$15.96	420,000	$15.96	7.73	320,000	$15.96
$16.86	To	$17.25	294,927	$17.06	7.75	103,137	$17.01
$17.57	To	$25.06	334,516	$21.36	8.30	71,876	$18.81
$25.62	To	$26.77	277,500	$26.68	9.16	24,375	$26.52
$30.64	To	$30.64	35,000	$30.64	9.64	2,916	$30.64
			2,194,116			1,246,291

Assumptions

The fair value of each option grant is estimated on the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions:

	2006	2005	2004
Expected life of option	5.5-6 yrs	4.78 yrs	4.42 yrs
Risk-free interest rate	4.90%	4.27%	3.52%
Expected volatility	45%	63.62%	87.3%
Expected dividend yield	0.00%	0.00%	0.00%

With the adoption of SFAS 123R in 2006, the Company has limited its issuance of stock options to senior executives, while granting restricted shares to employees at various levels. During the fourth quarter of 2005, prior to the adoption of SFAS 123R, management analyzed its expected volatility and expected life of stock options and concluded that the expected volatility for options granted during the fourth quarter of 2005 should be 45% and the expected life of the options granted should range between 5.5 and 6.0 years, depending on the grantee’s employee status. In 2006, the Company analyzed historical trends in these variables on a quarterly basis, resulting in a decrease in the Company’s expected volatility to 39% during the fourth quarter of 2006. For the year ended December 31, 2006 the Company elected to use the simplified method of determining the expected term as permitted by SAB 107 the range of the expected term remained unchanged at 5.5 to 6 years. The Company continues to base the estimate of risk-free rate on the U.S. Treasury yield curve in effect at the time of grant. The Company has never paid cash dividends and does not currently intend to pay cash dividends, and has certain restrictions under its credit facility to pay dividends and thus has assumed a 0% dividend yield. These conclusions were based on several factors, including past company history, current and future trends, comparable benchmarked data and other key metrics.

As part of the requirements of SFAS 123R, the Company is required to estimate potential forfeitures of stock grants and adjust compensation cost recorded accordingly. The forfeiture rate was estimated based on historical forfeitures. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of stock compensation expense to be recognized in future periods. The forfeiture rate utilized in 2006 was 3.25%.

A summary of the status and changes of the Company’s nonvested shares related to our equity incentive plan is presented below:

(in thousands, except per share amounts)	Shares			Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2004	10		$	8.45
Granted	23		$	17.27
Released	(5	)	$	8.45
Forfeited	--		$	--
Nonvested at December 31, 2004	28		$	15.70
Granted	186		$	20.70
Released	(5	)	$	8.45
Forfeited	(1	)	$	19.88
Nonvested at December 31, 2005	208		$	20.31
Granted	401		$	26.33
Released	(62	)	$	20.66
Forfeited	(27	)	$	24.67
Nonvested at December 31, 2006	520		$	24.66

 As of December 31, 2006, there was approximately $9.2 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Stock Plan; that cost is expected to be recognized over a weighted average of 3.3 years. The total fair value of shares vested during the years ended December 31, 2006, 2005 and 2004 were $1.8 million, $0.1 million, and $0.1 million, respectively.

14. Benefit Plans:

 inVentiv Health, Inc. and certain of its subsidiaries maintain a defined contribution benefit plans. Costs incurred by the Company related to this plan amounted to approximately $2.2 million, $1.1 million and $0.7 million for 2006, 2005 and 2004, respectively.

 On November 22, 2004, the Company adopted the Ventiv Health, Inc. Deferred Compensation Plan (the "Plan"), which was approved by its Board of Directors. The Plan provides eligible management and other highly compensated employees with the opportunity to defer, on a pre-tax basis, their salary, bonus, and other specified cash compensation and to receive the deferred amounts, together with a deemed investment return (positive or negative), either at a pre-determined time in the future or upon termination of employment with inVentiv Health, Inc. or an affiliated employer participating in the Plan. The compensation deferrals were initiated in 2005. The deferred compensation liability of approximately $4.2 million and $1.9 million were included in other liabilities in our Consolidated Balance Sheets as of December 31, 2006 and 2005, respectively. The Plan does not provide for the payment of above-market interest to participants.

 To assist in the funding of the Plan obligation, we participate in a corporate-owned life insurance program in a rabbi trust whereby it purchases life insurance policies covering the lives of certain employees, with inVentiv Health, Inc. named as beneficiary. Rabbi trusts are grantor trusts generally set up to fund compensation for a select group of management or highly paid executives. The cash value of the life insurance policy as of December 31, 2006 and 2005 were approximately $2.9 million and $1.4 million, respectively and are currently classified in Deposits and other assets on our Consolidated Balance Sheets. In addition, approximately $1.1 million and $0.5 million as of December 31, 2006 and 2005, respectively, were invested in mutual funds and classified in other current assets on our Consolidated Balance Sheets.

INVENTIV HEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15. Income Taxes:

Our income tax provision included the following components:

	For the Years Ended
	December 31,
		2006			2005			2004
	(in thousands)
Current:
U.S.—Federal	$	22,900		$	10,854		$	7,808
U.S.—State and local		2,811			1,721			1,707
Foreign		837			--			--
	$	26,548		$	12,575		$	9,515
Deferred:
U.S.—Federal	$	(7,183	)	$	1,739		$	(5,050	)
U.S.—State and local		(77	)		(85	)		(663	)
Foreign		(122	)		--			--
	$	(7,382	)	$	1,654		$	(5,713	)
Income tax provision	$	19,166		$	14,229		$	3,802

The provision for taxes on net income differs from the amount computed by applying the U.S. federal income tax rate as a result of the following:

	For the Years Ended
	December 31,
		2006		2005		2004
Taxes at statutory U.S. federal income tax rate		35.0	%	35.0	%	35.0	%
Foreign taxes		1.0		--		--
State and local income taxes, net of federal tax benefit		4.5		4.6		4.7
Release of valuation allowance/ Utilization of net operating losses / other tax benefits		(13.5	)	(15.3	)	(29.2	)
Other permanent differences		0.6		0.5		0.7
Effective tax rate		27.6	%	24.8	%	11.2	%

In June 2006, the Company recognized a tax benefit of approximately $9.1 million related to net operating losses associated with a previously-divested unit, as management determined that it is more likely than not that this deferred tax asset will be realized.

Deferred income taxes are recorded based upon differences between the financial statement and tax bases of assets and liabilities. As of December 31, 2006 and 2005, the deferred tax assets and liabilities consisted of the following:

	As of December 31,
		2006		2005
Current Deferred Assets:	(in thousands)
Accrued expenses	$	3,200	$	2,669
Deferred rent		410		131
Net operating loss carryforwards		136		3,546
Deferred revenue		377		331
Other		598		297
Subtotal		4,721		6,974

Non-Current Deferred Assets:

Deferred Compensation		3,128			232
Intangible Assets		--			1,774
Net operating loss carryforwards		2,827			12,235
Fixed Assets		6,152			16,481
Other		688			1,257
Subtotal		12,795			31,979
Gross Deferred Assets		17,516			38,953
Current Deferred Liabilities:
Accrued Expenses		(2,595	)		(2,075	)
Other		(584	)		(870	)
Subtotal		(3,179	)		(2,945	)
Non-Current Deferred Liabilities:
Property and Equipment		(4,688	)		(16,847	)
Intangible Assets		(11,402	)		(1,643	)
Other		(1,541	)		(14	)
Subtotal		(17,631	)		(18,504	)
Gross Deferred Liabilities		(20,810	)		(21,449	)
Valuation Allowance		(2,628	)		(10,047	)
Net deferred (liabilities) assets	$	(5,922	)	$	7,457

INVENTIV HEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During 2004, a deferred tax asset in the amount of $23.6 million was established for net operating loss carryforwards primarily related to the divestiture of certain subsidiaries. A valuation allowance of $20 million was established at that time related to net operating loss carryforwards for which the Company had concluded it was more likely than not that these loss carryforwards would not be realized in future periods. Management revised its assessment in the third quarter of 2005 and recorded a tax benefit of approximately $6.7 million primarily related to the reversal of a previously recorded valuation allowance as the Company determined an additional portion of its deferred tax asset was more likely than not expected to be realized. This and other items resulted in a reduction in the overall valuation allowance for deferred tax assets. The deferred tax asset related to loss carryforwards was also reduced for such assets utilized during the year ended December 31, 2005. For financial statement purposes, federal net operating loss carryforwards of approximately $45 million existed at December 31, 2005.

 During 2006, the Company re-evaluated its Federal income tax net operating loss carryforward position reported for financial statement purposes and concluded that it was probable that the Federal income tax net operating loss would be fully utilized in 2006. The Company determined that the deferred tax asset recorded for the Federal income tax net operating loss carryforward of $15.8 million and an offsetting valuation allowance of $9.1 million reported for financial statement purposes were no longer required. Accordingly, the Company reversed the December 31, 2005 balances which resulted in a balance sheet reclassification with no income statement tax effect, other than the reversal of approximately $9.1 million of valuation allowance as discussed above.

 A capital tax loss carryover in the amount of approximately $2.1 million and $2.8 million existed at December 31, 2006 and December 31, 2005, respectively, and will begin to expire in 2007. A valuation allowance has been recorded against the capital loss carryovers as management believes it is more likely than not that the associated deferred tax asset will not be realized in the future.

 During 2006, a deferred tax asset in the amount of $2.3 million was established primarily related to state net operating loss carryforwards. A valuation allowance of $1.9 million has been recorded against a portion of the state net operating loss carryforwards as management believes it is more likely than not that the associated deferred tax asset will not be realized in the future.  The gross amount of the state net operating losses is approximately $27.2 million and expires in varying amounts beginning in 2008 and continuing through 2026.

16. Discontinued Operations:

 For the years ended December 31, 2006, 2005 and 2004, income from discontinued operations, net of taxes, were $2.0 million, $0.8 million and $1.0 million, respectively. For the years ended December 31, 2006, 2005 and 2004, income from discontinued operations, net of taxes, mainly consisted of contingency payments due from our previously divested Germany and Hungary-based operations. In addition, approximately $1.2 million of tax liability was reversed since the receivership of the previously-divested France-based unit was finalized during the fourth quarter of 2006.

17. Related Parties:

 The Company is currently in a lease with Olde Worthington Road LLC for inVentiv Communications’ Services’ current headquarters facility in Westerville, Ohio. This facility is partially owned by the current inVentiv Communications’ Chief Executive Officer (who is also a member of the Board of Directors), his brothers and other current employees of inVentiv Communications through their ownership in GSW Capital LLC. GSW Capital LLC is a 50% owner of Olde Worthington Road LLC. The term of the lease is fifteen years, and expires on September 30, 2015.

18. Segment Information:

 The Company currently manages three operating segments: inVentiv Clinical, inVentiv Communications and inVentiv Commercial, and its non-operating reportable segment, “Other”, which is based on the way management makes operating decisions and assesses performance. The following represents the Company’s reportable segments:

·   inVentiv Clinical, which provides services related to permanent placement, clinical staffing, data collection and management and functional outsourcing

·   inVentiv Communications, which provides services related to pharmaceutical advertising, branding, interactive communication development and patient and physician education

·   inVentiv Commercial, which consists of the Company’s outsourced sales and marketing teams, planning and analytics services, sample accountability and patient assistance businesses, marketing support services, professional development and training, and recruitment of sales representatives in the commercial services area.

·   Other, which encompasses the activities of the corporate management group.

 In August 2005, the Company acquired PRS, which is reported in the inVentiv Commercial segment from the date of its acquisition. In October 2005, the Company acquired inVentiv Communications, Inc., which created the operating segment, inVentiv Communications, from the date of its acquisition. In February 2006, the Company acquired Adheris, which is reported in the inVentiv Communications segment from the date of its acquisition. In April 2006, the Company acquired Synergos, which is reported in the inVentiv Clinical segment from the date of its acquisition and JSAI, which is reported in the inVentiv Communications segment from the date of its acquisition. During the fourth quarter of 2006, the Company acquired MedConference and DialogCoach, which are both reported in the inVentiv Commercial segment from the dates of their acquisitions.

For the year ended December 31, 2006 (in thousands):

		inVentiv Clinical		inVentiv Communications		inVentiv Commercial		Other			Total
Revenues	$	150,317	$	258,063	$	363,934	$	--		$	772,314
Less: Intersegment revenues		531		1,008		4,530		--			6,069
Reported Revenues		149,786		257,055		359,404		--			766,245
Depreciation and amortization		1,527		5,035		14,090		88			20,740
Interest expense		--		95		1,781		9,485			11,361
Interest income		61		722		--		1,911			2,694
Segment income (loss)(1)		11,623		35,587		42,477		(20,276	)		69,411

For the year ended December 31, 2005 (in thousands):

		inVentiv Clinical		inVentiv Communications		inVentiv Commercial		Other			Total
Revenues	$	113,717	$	48,901	$	394,552	$	--		$	557,170
Less: Intersegment revenues		17		175		666		--			858
Reported Revenues		113,700		48,726		393,886		--			556,312
Depreciation and amortization		1,241		679		15,420		85			17,425
Interest expense		--		19		1,275		2,661			3,955
Interest income		35		47		114		1,213			1,409
Segment income (loss)(1)	$	9,563	$	5,677	$	54,271	$	(12,083	)	$	57,428

INVENTIV HEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2004 (in thousands):

		inVentiv Clinical	inVentiv Communications		inVentiv Commercial		Other			Total
Revenues	$	21,694	--	$	330,953	$	--		$	352,647
Less: Intersegment revenues		6	--		457					463
Reported revenues		21,688	--		330,496					352,184
Depreciation and amortization		219	--		15,613		76			15,908
Restructuring		--	--		249		15			264
Interest expense		--	--		627		295			922
Interest income		5	--		51		622			678
Segment income (loss) (1)	$	1,709	--	$	40,873	$	(8,650	)	$	33,932

⁽¹⁾ Income from continuing operations before income tax provision, minority interest in income of subsidiary and income from equity investments

(in thousands)	December 31,
		2006		2005
Total Assets:
inVentiv Clinical	$	105,253	$	84,731
inVentiv Communications		408,859		248,986
inVentiv Commercial		192,975		171,468
Other		63,967		78,709
Total assets	$	771,054	$	583,894

.

INVENTIV HEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

19. Selected Quarterly Financial Data (unaudited, in thousands):

The following table summarizes financial data by quarter for inVentiv for 2006 and 2005.

	2006 Quarter Ended (b)
		March 31		June 30		Sept. 30		Dec. 31		Total (a()
	(in thousands, except per share amounts)
Revenues	$	173,677	$	182,979	$	197,780	$	211,809	$	766,245
Gross profit		48,869		55,119		56,372		59,136		219,496
Income from continuing operations		10,143		19,864		10,195		8,996		49,198
Income from discontinued operations		105		1,115		49		768		2,037
Net income		10,248		20,979		10,244		9,764		51,235
Earnings (losses) per share (a)
Continuing operations:
Basic	$	0.36	$	0.68	$	0.35	$	0.30	$	1.69
Diluted	$	0.35	$	0.66	$	0.34	$	0.29	$	1.64
Discontinued operations:
Basic	$	0.00	$	0.04	$	0.00	$	0.03	$	0.07
Diluted	$	0.00	$	0.03	$	0.00	$	0.03	$	0.06
Net income:
Basic	$	0.36	$	0.72	$	0.35	$	0.33	$	1.76
Diluted	$	0.35	$	0.69	$	0.34	$	0.32	$	1.70

	2005 Quarter Ended (b)
		March 31		June 30		Sept. 30		Dec. 31			Total (a)
	(in thousands, except per share amounts)
Revenues	$	120,859	$	131,788	$	128,359	$	175,306		$	556,312
Gross profit		27,147		32,027		30,595		49,518			139,287
Income from continuing operations		9,192		9,032		15,033		9,825			43,082
Income (losses) from discontinued operations		99		1,463		78		(859	)		781
Net income (losses)		9,291		10,495		15,111		8,966			43,863
Earnings (losses) per share (a)
Continuing operations:
Basic	$	0.35	$	0.34	$	0.56	$	0.35		$	1.60
Diluted	$	0.33	$	0.32	$	0.53	$	0.35		$	1.53
Discontinued operations:
Basic	$	0.01	$	0.05	$	0.00	$	(0.03	)	$	0.03
Diluted	$	0.01	$	0.06	$	0.01	$	(0.05	)	$	0.03
Net income (losses):
Basic	$	0.36	$	0.39	$	0.56	$	0.32		$	1.63
Diluted	$	0.34	$	0.38	$	0.54	$	0.30		$	1.56

(a)The sum of the net earnings per share do not add up to the full year amount due to rounding and because the quarterly calculations are based on varying numbers of shares outstanding.

(b)The above tables have been reclassified as per SFAS No. 144 for the effects of discontinued operations. See Note 16 for a further description.

SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS

YEARS ENDED DECEMBER 31, 2006, 2005 and 2004

(in thousands)

			Additions					Deductions
		Balance at Beginning Of Year		Charged to Cost and Expense		Charged to other Accounts(1)		from Reserve for Purpose for which Reserve was Created		Balance at End Of Year
Allowances for Doubtful Accounts:
Year ended December 31, 2006	$	3,979	$	2,257	$	145	$	2,798	$	3,583
Year ended December 31, 2005	$	1,980	$	1,404	$	2,039	$	1,444	$	3,979
Year ended December 31, 2004	$	2,019	$	643	$	141	$	823	$	1,980

⁽¹⁾ Reserves acquired through acquisitions.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)), as of the end of the period covered by this annual report on Form 10-K. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2006 our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission and that material information relating to us and our consolidated subsidiaries is made known to management, including the Chief Executive Officer and Chief Financial Officer during the period when our periodic reports are being prepared. There were no changes in our internal controls over financial reporting during the year ended December 31, 2006 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Please refer to the Report of Independent Registered Public Accounting Firm for further details of the auditor’s opinion on the audit of our consolidated balance sheets as of December 31, 2006 and 2005; the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2006; the financial statement schedule listed in the Index at Item 15(a); and also management's assessment, included under the caption Management's Report on Internal Control Over Financial Reporting, that we maintained effective internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Management’s Report on Internal Control over Financial Reporting

Management’s Report on Internal Control Over Financial Reporting and the corresponding Report of Independent Registered Public Accounting Firm are included in Item 8, Financial Statements and Supplementary Data, of this report. See page 32.

Item 9B. Other Information.

At its meeting on February 23, 2007, our Compensation Committee approved an increase in Eran Broshy's miminum target bonus from 50% of base salary to 100% of base salary retroactive to 2006 and made a corresponding modification in the target level for Mr. Broshy under our cash bonus plan. Accordingly, for fiscal years commencing with 2006, with respect to Mr. Broshy, the cash bonus plan provides for payment of a 100% target bonus amount based on 70% on the achievement of budgeted EBIT targets and a 30% discretionary component based on individual performance.

As part of the closing under our definitive agreement to acquire Chamberlain, which we entered into on February 26, 2007, we will be obligated to issue for the account of the selling stockholders of Chamberlain 85,179 unregistered shares of our common stock in partial consideration for Chamberlain. The closing is expected to occur on or about March 1, 2007, subject to the satisfaction of closing conditions. The issuance is exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended, because there was no general solicitation or advertising, the number of recipients of such unregistered shares is limited and such recipients are accredited and/or sophisticated.

As part of the closing under our definitive agreement to acquire Ignite, which we entered into on February 26, 2007, we will be obligated to issue for the account of Ignite 108,992 unregistered shares of our common stock in partial consideration for Ignite. The closing is expected to occur on or about March 1, 2007, subject to the satisfaction of closing conditions. The issuance is exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended, because there was no general solicitation or advertising, the number of recipients of such unregistered shares is limited and such recipients are accredited and/or sophisticated.

PART III

The information required by Items 10, 11, 12, 13 and 14 of Firm 10-K will be set forth in our Proxy Statement (to be filed within 120 days after our fiscal year ended December 31, 2006) relating to the 2007 Annual Meeting of Stockholders and is incorporated by reference herein.

PART IV

Item 15. Financial Statement Schedules.

(a) 1. The following Consolidated Financial Statements of inVentiv Health, Inc. are filed under "Item 8. Financial Statements and Supplementary Data."

Consolidated Balance Sheets as of December 31, 2006 and 2005

Consolidated Statements of Operations for the years ended December 31, 2006, 2005 and 2004.

Consolidated Statements of Stockholders' Equity for the years ended December 31, 2006, 2005 and 2004.

Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004.

Notes to Consolidated Financial Statements

2. The following financial statement schedule is filed under "Item 8. Financial Statements and Supplementary Data."

Schedule II--Valuation and Qualifying Accounts

All other schedules are omitted because they are not applicable or are not required under Regulation S-X.

3. The following exhibits are filed herewith or are incorporated herein by reference, as indicated.

(b)

Exhibit	Description
3.1	Amended and Restated Certificate of Incorporation of the Registrant (filed as Exhibit 3.1 to the Registrant's Form 10 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
3.2	Amended and Restated By-Laws of the Registrant (filed as Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed December 18, 2006). *
4.1	Specimen form of certificate representing the Registrant’s common stock (filed as Exhibit 4.1 to the Registrant's Form 10 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.1	Form of Distribution Agreement between Snyder Communications, Inc. and the Registrant (filed as Exhibit 10.1 to the Registrant's Form 10 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.2	Form of Tax Sharing Agreement between Snyder Communications, Inc. and the Registrant (filed as Exhibit 10.2 to the Registrant's Form 10 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.4	inVentiv Health, Inc. 1999 Stock Incentive Plan, as amended. (filed as Appendix A to the Registrant’s 2004 Proxy Statement filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended).*
10.4.1	Form of Executive Officer Stock Option Agreement. (filed as Exhibit 10.4.1 to the Registrant's Annual Report on Form 10-K filed for the fiscal year ended December 31, 2004 with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.4.2	Form of Director Stock Option Agreement. (filed as Exhibit 10.4.2 to the Registrant's Annual Report on Form 10-K filed for the fiscal year ended December 31, 2004 with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.4.3	Form of Restricted Stock Agreement. (filed as Exhibit 10.4.3 to the Registrant's Annual Report on Form 10-K filed for the fiscal year ended December 31, 2004 with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.4.4	Form of Director Restricted Stock Agreement. (filed as Exhibit 10.4.4 to the Registrant's Annual Report on Form 10-K filed for the fiscal year ended December 31, 2004 with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.4.5	inVentiv Health, Inc. 2006 Long-Term Incentive Plan. (filed as Exhibit 10.21 to the Registrant's Current Report on Form 8-K filed June 19, 2006 with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.4.6	Form of Executive Officer Stock Option Award Notice.
10.4.7	Form of Executive Officer Restricted Stock Award Notice.
10.4.8	Form of Director Stock Option Award Notice.
10.4.9	Form of Director Restricted Stock Award Notice.
10.5	Employment Agreement, dated May 9, 2006 by and between Eran Broshy and inVentiv Health, Inc. (filed as Exhibit 10.21 to the Registrant's Quarterly Report on Form 10-Q for the three months ended March 31, 2006 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.5.1	Amendment dated February 23, 2007 to Employment Agreement, dated May 9, 2006, by and between Eran Broshy and the Registrant.
10.9	Employment Agreement, dated August 13, 2001 by and between John R. Emery and the Registrant (filed as Exhibit 10.9 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2001 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.9.1	Amendment dated January 1, 2004 to Employment Agreement, dated August 13, 2001, by and between John R. Emery and the Registrant (filed as Exhibit 10.9.1 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2003 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.11	Employment Agreement, dated April 8, 2002 by and between Terrell Herring and the Registrant (filed as Exhibit 10.11 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2002 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.11.1	Amendment dated January 1, 2004 to Employment Agreement, dated April 8, 2002, by and between Terrell Herring and the Registrant (filed as Exhibit 10.11.1 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2003 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.12	Asset Purchase Agreement dated as of September 21, 2004 among the Registrant, Smith Hanley Holding Corporation and the other parties thereto (filed as Exhibit 2.1 to the Registrant's Form 8-K/A filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended, on December 29, 2004). * #
10.13	The Registrant 2005 Deferred Compensation Plan (filed as Exhibit 10.1 to the Registrant's Form 8-K filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended, on November 29, 2004). *
10.14	Asset Purchase Agreement dated as of November 19, 2004 among the Registrant, HHI, L.L.C. and the other parties thereto (filed as Exhibit 10.14 to the Registrant's Quarterly Report on Form 10-Q for the three months ended March 31, 2005 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *#
10.15	Asset Purchase Agreement dated as of August 5, 2005 among the Registrant, Pharmaceutical Resource Solutions LLC and the other parties thereto (filed as Exhibit 10.15 to the Registrant's Quarterly Report on Form 10-Q for the three months ended September 30, 2005 filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *#
10.16	Acquisition Agreement dated September 6, 2005 by and among inChord Communications, Inc., the shareholders of inChord Communications, Inc., the Registrant and Accordion Holding Corporation (filed as Exhibit 2.1 to the Registrant's Current Report on Form 8-K filed October 11, 2006 with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.17	Form of Indemnification Agreement entered into with each executive officer and director of Ventiv (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed October 11, 2006 with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.18	Employment Agreement dated as of September 6, 2005 between inChord Communications, Inc. and R. Blane Walter (filed as Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed October 11, 2006 with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.19	Credit Agreement dated as of October 5, 2005 among the Registrant, the Subsidiary Guarantors, the lenders party thereto, UBS Securities LLC, as bookmanager, as joint lead arranger, and as documentation agent, UBS Loan Finance LLC, as swingline lender, UBS AG, Stamford Branch, as issuing bank, as administrative agent for the Lenders and as collateral agent, Banc of America Securities LLC, as joint lead arranger, and Bank of America, N.A., as syndication agent (filed as Exhibit 10.3 to the Registrant's Current Report on Form 8-K filed October 11, 2006 with the Securities and Exchange Commission under the Securities Act of 1934, as amended). *
10.20	Acquisition-Related Incentive Plan
21.1	Subsidiaries of inVentiv Health, Inc.
23	Consent of Deloitte & Touche LLP.
31.1	Chief Executive Officer’s Certification Pursuant to Rule 13a-14(a) of the Exchange Act
31.2	Chief Financial Officer’s Certification Pursuant to Rule 13a-14(a) of the Exchange Act
32.1	Chief Executive Officer's Certification of Financial Statements Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Chief Financial Officer's Certification of Financial Statements Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Incorporated by reference.

# Certain portions omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

INVENTIV HEALTH, INC.

Date:   February 28, 2007	By:	/s/ John R. Emery
		John R. Emery
		Title: Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ ERAN BROSHY	Chief Executive Officer and Director	February 28, 2007
Eran Broshy	(Chairman of the Board and Principal Executive Officer)
/s/ JOHN R. EMERY	Chief Financial Officer	February 28, 2007
John R. Emery	(Principal Financial Officer and Principal Accounting Officer)
/s/ TERRELL G. HERRING	President and CEO, inVentiv Commercial	February 28, 2007
Terrell G. Herring	(Director)
/s/ BLANE WALTER	President and CEO, inVentiv Communications	February 28, 2007
Blane Walter	(Director)
/s/ DONALD CONKLIN	Director	February 28, 2007
Donald Conklin
/s/ JOHN R. HARRIS	Director	February 28, 2007
John R. Harris
/s/ MARK E. JENNINGS	Director	February 28, 2007
Mark E.Jennings
/s/ PER G.H. LOFBERG	Director	February 28, 2007
Per G.H. Lofberg
/s/ A. CLAYTON PERFALL	Director	February 28, 2007
A. Clayton Perfall
/s/ DR.. CRAIG SAXTON	Director	February 28, 2007
Dr. Craig Saxton

EX-10.4.6

Exhibit 10.4.6

INVENTIV HEALTH, INC.

Notice of Grant of

Stock Option

Grantee:

Grant Date: , 20

You are granted, effective as of the above grant date (the “Option Grant Date”), an option (the “Option”) to purchase shares of common stock, $0.001 par value (the “Options Shares”), of inVentiv Health, Inc. (the “Corporation”), pursuant to the inVentiv Health, Inc. 2006 Long-Term Incentive Plan (the “Plan”). The Option is subject to the terms and conditions set forth below and in the Plan, which is incorporated into and made a part of this Stock Option Agreement (this “Agreement”). Capitalized terms used in the Agreement have the same meaning as defined in the Plan.

Shares issuable upon exercise of the Option in accordance with the terms hereof will be delivered electronically, and you are required to establish an account with a brokerage firm selected by the Company as a condition to such exercise.

1.   Exercise Price: $ per Option Share.

a.    Number of Option Shares:

b.    Type of Option: Nonqualified Stock Option (i.e., an option which is not an incentive stock option under Section 422 of the Code).

c.    Vesting: The Option will vest as follows:

·   the Option shall vest with respect to 25% of the Option Shares on the first anniversary of the Option Grant Date;

·   the Option shall vest with respect to 25% of the Option Shares on the second anniversary of the Option Grant Date;

·   the Option shall vest with respect to 25% of the Option Shares on the third anniversary of the Option Grant Date; and

·   the Option shall vest with respect to 25% of the Option Shares on the fourth anniversary of the Option Grant Date.

d.    [For executive officers who are Board members: The Option shall immediately become vested with respect to all Option Shares in the event that (i) a transaction or a series of related transactions is consummated involving (A) a sale, transfer or other disposition of all or substantially all of the Corporation's assets, (B) the consummation of a merger or consolidation of the Corporation or (C) a sale or exchange of capital stock of the Corporation, in any case as a result of which the stockholders of the Corporation immediately prior to such transaction or series of related transactions own, in the aggregate, less than a majority of the outstanding voting capital stock or equity interests of the surviving, resulting or transferee entity or (ii) you die or become disabled while you are employed by the Corporation.]

[For other executive officers: In the event that your employment with the Corporation or its successor company (or a subsidiary thereof) is terminated “Without Cause” (as defined in the existing Employment Agreement between the Company and you) upon or before six (6) months following a Change of Control (as defined in the Plan) of the Corporation in which the successor company assumes or substitutes for the Option, the Option shall immediately become vested with respect to all Option Shares.

e.    Any unexercised portion of the Option shall be cancelled and terminated without payment therefor if the Fair Market Value of one share of Common Stock as of the date of a Change of Control is less than the exercise price per Option Share set forth above.

2.   Registration Under Federal and State Securities Laws: The Option may not be exercised and the Corporation is not required to deliver Option Shares unless such Option Shares have been registered under Federal and applicable state securities laws, or are then exempt from such registration requirements.

3.   Forfeiture of Option: The unexercised portion of the Option is subject to forfeiture upon a determination by the Committee that you have engaged in any of the conduct described in the first sentence of Section 13.5 of the Plan and that the Option should be forfeited as a consequence.

4.   Expiration Date: The vested portion of the Option expires three months after termination of service to the Corporation, except if your service terminates by reason of death or disability, in which case the vested portion of the Option expires one year after termination of service to the Corporation. Except as provided in Section 1.d, the portion of the Option that has not vested as of the date of termination of your provision of services to the Corporation will be forfeited and returned to the Corporation, and all rights of you or your heirs in and to such portion of the Option will terminate, unless the Committee determines otherwise in its sole and absolute discretion. Subject to earlier termination as provided in this Agreement and the Plan, the Option expires on the 10^th anniversary of the Option Grant Date.

5.   Tax Withholding. It is a condition to the award of the Option that you make arrangements satisfactory to the Corporation to satisfy all tax withholding amounts and other required deductions with respect to the Option and the Option Shares. You will be permitted to satisfy these obligations by (i) making a cash payment to the Corporation or (ii) directing the Corporation to sell vested Option Shares as to which the Option has been exercised in an amount sufficient to generate net proceeds equal to or exceeding the amount of such obligations. If you do not satisfy such obligations as and when the same become due, the Corporation will withhold a number of vested Option Shares as to which the Option has been exercised having a value, determined in the sole discretion of the Corporation, equal to the amount of the unsatisfied obligations and you will have no further interest in the withheld Option Shares or any proceeds thereof and will have no right to be compensated therefor.

6.   Restrictions on Transfer: You are not permitted to sell, assign, transfer or otherwise encumber any portion of the Option, other than by will or the laws of descent and distribution, and any such attempted disposition or encumbrance shall be void and unenforceable against the Corporation, provided that you may assign or transfer the Option or a portion thereof with the consent of the Committee to (a) your spouse, children or grandchildren (including any adopted and step children or grandchildren), (b) to a trust or partnership for the benefit of one or more of you or the persons referred to in clause (a), or (c) for charitable donations; provided that the recipient shall be bound by and subject to all of the terms and conditions of the Plan and this Agreement and shall execute an agreement satisfactory to the Corporation evidencing such obligations; and provided further that you shall remain bound by the terms and conditions of the Plan.

7.   Dispute Resolution. Any controversy or claim arising out of or relating to this award will be submitted to arbitration under the auspices of the American Arbitration Association in accordance with its Commercial Dispute Resolution Procedures and Rules and at its office in Wilmington, Delaware. The award of the arbitrator will be final and binding upon the parties, and judgment may be entered with respect to such award in any court of competent jurisdiction. The award or decision rendered by the arbitrator will be final, binding and conclusive and judgment may be entered upon such award by any court of competent jurisdiction.

INVENTIV HEALTH, INC.

EX-10.4.7

Exhibit 10.4.7

[FORM OF EXECUTIVE OFFICER RESTRICTED STOCK AWARD NOTICE]

INVENTIV HEALTH, INC.

Notice of Grant of

Shares of Restricted Common Stock

Grantee:

Number of Shares:

Grant Date: , 20

The Grantee named above has been awarded restricted shares (the “Restricted Stock”) of the common stock, par value $.001 per share, of inVentiv Health, Inc. (the "Company"). This Notice of Grant outlines certain terms and conditions of the award. Additional terms and conditions of the award are contained in the inVentiv Health, Inc. 2006 Long-Term Incentive Plan (the “Plan”). The Restricted Stock is granted under and will be governed by terms of the Plan.

1. Rights as Stockholder. Subject to the terms of the award, from and after the Grant Date, the Grantee will have all of the rights of a stockholder with respect to the Restricted Stock, including the right to vote such shares of Restricted Stock and, subject to Section 7.3 of the Plan, the right to participate in all dividends and distributions with respect to the Company’s Common Stock; provided, however, that any additional shares of common stock or other securities that the Grantee may become entitled to receive pursuant to a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation, separation or reorganization or any other change in the capital structure of the Company will be subject to the same restrictions as the shares of Restricted Stock included in the award.

2. Restrictions; Delivery. (a) Until the Restricted Stock granted hereunder vests in accordance with Section 3 hereof, one or more stock certificates representing the unvested portion of the Restricted Stock will be issued in the Grantee's name, but will be held in custody by the Company or an escrow agent (which may be a brokerage firm) appointed by the Company. Alternatively, the unvested portion of the Restricted Stock may be reflected in an electronic account. The Grantee will not be permitted to sell, transfer, assign, give, place in trust or otherwise dispose of or pledge, grant a security interest in or otherwise encumber unvested shares of Restricted Stock, other than by will or the laws of descent and distribution, and any such attempted disposition or encumbrance will be void and unenforceable against the Company, provided that the Grantee may assign or transfer unvested shares of Restricted Stock with the consent of the Committee to (a) the Grantee’s spouse, children or grandchildren (including any adopted and step children or grandchildren), (b) to a trust or partnership for the benefit of one or more of the Grantee or the persons referred to in clause (a), or (c) for charitable donations; provided that the recipient shall be bound by and subject to all of the terms and conditions of the Plan and this Agreement and shall execute an agreement satisfactory to the Company evidencing such obligations; and provided further that such Grantee shall remain bound by the terms and conditions of the Plan. Subject to applicable law, the Grantee may sell, transfer, assign, give, place in trust, or otherwise dispose of or pledge, grant a security interest in, or otherwise encumber vested shares of Restricted Stock.

(b) Subject to the provisions of this award, upon the vesting of any shares of Restricted Stock, the Company will deliver to the Grantee a certificate or certificates for the number of shares of Restricted Stock which have so vested. Alternatively, the Company may elect to deliver vested shares of Restricted Stock electronically, and if it does so, this award is conditioned upon the Grantee establishing an account with a brokerage firm selected by the Company for the purpose of receiving such shares.

3. Vesting of Restricted Stock. (a) The Restricted Stock will vest (and become non-forfeitable) as follows:

·   25% of the shares of Restricted Stock will vest on the first anniversary of the Grant Date;

·   25% of the shares of Restricted Stock will vest on the second anniversary of the Grant Date;

·   25% of the shares of Restricted Stock will vest on the third anniversary of the Grant Date; and

·   25% of the shares of Restricted Stock will vest on the fourth anniversary of the Grant Date.

(b)[For executive officers who are Board members: All shares of Restricted Stock shall immediately become vested in the event that (i) a transaction or a series of related transactions is consummated involving (A) a sale, transfer or other disposition of all or substantially all of the Corporation's assets, (B) the consummation of a merger or consolidation of the Corporation or (C) a sale or exchange of capital stock of the Corporation, in any case as a result of which the stockholders of the Corporation immediately prior to such transaction or series of related transactions own, in the aggregate, less than a majority of the outstanding voting capital stock or equity interests of the surviving, resulting or transferee entity or (ii) the Grantee dies or becomes disabled while the Grantee is employed by the Corporation.]

[For other executive officers: In the event that the Grantee's employment with the Company or its successor company (or a subsidiary thereof) is terminated “Without Cause” (as defined in the existing Employment Agreement between the Grantee and the Company) upon or before six (6) months following a Change of Control (as defined in the Plan) of the Company in which the successor company assumes or substitutes for the shares of Restricted Stock, all unvested shares of Restricted Stock will immediately become vested.

(c)Vesting will occur only if the Grantee is employed by the Company on the vesting date, unless the Committee determines otherwise in its sole and absolute discretion.

4. Tax Withholding. It is a condition to the award of the Restricted Stock to the Grantee that the Grantee make arrangements satisfactory to the Company to satisfy all tax withholding amounts and other required deductions with respect to the Restricted Stock. The Grantee will be permitted to satisfy these obligations by (i) making a cash payment to the Company or (ii) directing the Company to sell vested shares of Restricted Stock in an amount sufficient to generate net proceeds equal to or exceeding the amount of such obligations. If the Grantee does not satisfy such obligations as and when the same become due, the Company will withhold a number of shares of Restricted Stock having a value, determined in the sole discretion of the Company, equal to the amount of the unsatisfied obligations and the Grantee will have no further interest in the withheld shares or any proceeds thereof and will have no right to be compensated therefor.

5. Regulatory Compliance. The issuance and delivery of any stock certificates representing vested shares of Restricted Stock may be postponed by the Company for such period as may be required to comply with any applicable requirements under the federal securities laws or under any other law or regulation applicable to the issuance or delivery of such shares. The Company will not be obligated to deliver any vested shares of Restricted Stock to the Grantee if the Company believes that such delivery would constitute a violation of any applicable law or regulation.

6. Representations and Warranties. The Grantee is prohibited from selling vested shares of Restricted Stock other than pursuant to either (i) a registration statement on an appropriate form under the Securities Act of 1933, as amended (the “Securities Act”), which registration statement has become effective and is current with regard to the shares being sold, or (ii) if a registration statement covering the Restricted Stock is not effective at the time of issuance, a specific exemption from the registration requirements of the Securities Act that is confirmed in a favorable written opinion of counsel, in form and substance satisfactory to counsel for the Company, prior to any such sale or distribution, provided that the Company will not require opinions of counsel for transfers of shares of Restricted Stock made pursuant to Rule 144 if the Company is provided with any certificates or other evidence of compliance with Rule 144 reasonably required by it in connection with such transfer (including a copy of the relevant Form 144).

7. Legends. (a) Each certificate representing any unvested shares of Restricted Stock shall be endorsed with a legend in substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A CERTAIN RESTRICTED STOCK AWARD NOTICE, DATED AS OF (GRANT DATE), WHICH PROVIDES, AMONG OTHER THINGS, FOR CERTAIN RESTRICTIONS ON THE TRANSFER AND ENCUMBRANCE OF SUCH SHARES. A COPY OF SUCH NOTICE IS ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY

(b) In addition to the legend set forth in paragraph (a) and above, until registered under the Securities Act, each certificate representing shares of Restricted Stock shall be endorsed with a legend in substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT SUCH REGISTRATION, EXCEPT UPON DELIVERY TO THE COMPANY OF SUCH EVIDENCE AS MAYBE SATISFACTORY TO COUNSEL FOR THE COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER;

8. Miscellaneous.

(a) Construction. This award will be construed by and administered under the supervision of the Committee, and all determinations of the Committee will be final and binding on the Grantee.

(b) Dilution. Nothing in this award will restrict or limit in any way the right of the Board of Directors of the Company to issue or sell stock of the Company (or securities convertible into stock of the Company) on such terms and conditions as it deems to be in the best interests of the Company, including, without limitation, stock and securities issued or sold in connection with mergers and acquisitions, stock and securities issued or sold in connection with investments in the Company, stock issued or sold in connection with any stock option or similar plan, and stock issued or contributed to any qualified stock bonus or employee stock ownership plan.

(c) Dispute Resolution. Any controversy or claim arising out of or relating to this award will be submitted to arbitration under the auspices of the American Arbitration Association in accordance with its Commercial Dispute Resolution Procedures and Rules and at its office in Wilmington, Delaware. The award of the arbitrator will be final and binding upon the parties, and judgment may be entered with respect to such award in any court of competent jurisdiction. The award or decision rendered by the arbitrator will be final, binding and conclusive and judgment may be entered upon such award by any court of competent jurisdiction.

(d) Forfeiture of Restricted Stock. The Restricted Stock is subject to forfeiture upon a determination by the Committee that the Executive has engaged in any of the conduct described in the first sentence of Section 13.5 of the Plan and that the Restricted Stock should be forfeited as a consequence.

INVENTIV HEALTH, INC.

EX-10.4.8

Exhibit 10.4.8

[FORM OF DIRECTOR STOCK OPTION AWARD NOTICE]

INVENTIV HEALTH, INC.

Notice of Grant of

Stock Option

Grantee:

Grant Date: , 20

You are granted, effective as of the above grant date (the “Option Grant Date”), an option (the “Option”) to purchase shares of common stock, $0.001 par value (the “Options Shares”), of inVentiv Health, Inc. (the “Company”), pursuant to the inVentiv Health, Inc. 2006 Long-Term Incentive Plan (the “Plan”). The Option is subject to the terms and conditions set forth below and in the Plan, which is incorporated into and made a part of this Stock Option Agreement (this “Agreement”). Capitalized terms used in the Agreement have the same meaning as defined in the Plan.

Shares issuable upon exercise of the Option in accordance with the terms hereof will be delivered electronically, and you are required to establish an account with a brokerage firm selected by the Company as a condition to such exercise.

1.   Exercise Price: $ per Option Share.

a.    Number of Option Shares:

b.    Type of Option: Nonqualified Stock Option (i.e., an option which is not an incentive stock option under Section 422 of the Code).

c.    Vesting: The Option will vest as follows:

·   the Option shall vest with respect to 25% of the Option Shares on the first anniversary of the Option Grant Date;

·   the Option shall vest with respect to 25% of the Option Shares on the second anniversary of the Option Grant Date;

·   the Option shall vest with respect to 25% of the Option Shares on the third anniversary of the Option Grant Date; and

·   the Option shall vest with respect to 25% of the Option Shares on the fourth anniversary of the Option Grant Date.

d.    Any unexercised portion of the Option shall be cancelled and terminated without payment therefor if the Fair Market Value of one share of Common Stock as of the date of a Change of Control is less than the exercise price per Option Share set forth above.

e.    Any unvested portion of the Option will immediately become vested in the event that (i) (A) you are not nominated for reelection to the Board of Directors in connection with any stockholder meeting or consent pursuant to which directors are elected (other than by reason of your resignation), unless your term in office would not be affected by the election of the directors who are so nominated, (B) notwithstanding any such nomination, you are not reelected to the Board of Directors upon the expiration of your term or (C) you are removed from the Board of Directors (in each case other than for Cause), (ii) there is a Change of Control with respect to the Company while you are a member of the Board of Directors or (iii) you die or become disabled while you are a member of the Board of Directors. For purposes hereof, "Cause" means gross negligence, willful misconduct, breach of fiduciary duty or other matters determined by the Board to constitute cause upon notice to you.

2.   Registration Under Federal and State Securities Laws: The Option may not be exercised and the Company is not required to deliver Option Shares unless such Option Shares have been registered under Federal and applicable state securities laws, or are then exempt from such registration requirements.

3.   Forfeiture of Option: The unexercised portion of the Option is subject to forfeiture upon a determination by the Committee that you have engaged in any of the conduct described in the first sentence of Section 13.5 of the Plan and that the Option should be forfeited as a consequence.

4.   Expiration Date: The vested portion of the Option expires three months after termination of service to the Company, except if your service terminates by reason of death or disability, in which case the vested portion of the Option expires one year after termination of service to the Company. The portion of the Option that has not vested as of the date of termination of your provision of services to the Company for any reason whatsoever, with or without cause, whether voluntarily or involuntarily, will be forfeited and returned to the Company, and all rights of you or your heirs in and to such portion of the Option will terminate, unless the Committee determines otherwise in its sole and absolute discretion. Subject to earlier termination as provided in this Agreement and the Plan, the Option expires on the 10^th anniversary of the Option Grant Date.

5.   Taxes. The Company will not withhold or pay any local, state or federal taxes on your behalf. You shall be solely responsible for the payment of any such taxes.

6.   Restrictions on Transfer: You are not permitted to sell, assign, transfer or otherwise encumber any portion of the Option, other than by will or the laws of descent and distribution, and any such attempted disposition or encumbrance shall be void and unenforceable against the Company, provided that you may assign or transfer the Option or a portion thereof with the consent of the Committee to (a) your spouse, children or grandchildren (including any adopted and step children or grandchildren), (b) to a trust or partnership for the benefit of one or more of you or the persons referred to in clause (a), or (c) for charitable donations; provided that the recipient shall be bound by and subject to all of the terms and conditions of the Plan and this Agreement and shall execute an agreement satisfactory to the Company evidencing such obligations; and provided further that you shall remain bound by the terms and conditions of the Plan.

7.   Dispute Resolution. Any controversy or claim arising out of or relating to this award will be submitted to arbitration under the auspices of the American Arbitration Association in accordance with its Commercial Dispute Resolution Procedures and Rules and at its office in Wilmington, Delaware. The award of the arbitrator will be final and binding upon the parties, and judgment may be entered with respect to such award in any court of competent jurisdiction. The award or decision rendered by the arbitrator will be final, binding and conclusive and judgment may be entered upon such award by any court of competent jurisdiction.

INVENTIV HEALTH, INC.

EX-10.4.9

Exhibit 10.4.9

[FORM OF DIRECTOR RESTRICTED STOCK AWARD NOTICE]

INVENTIV HEALTH, INC.

Notice of Grant of

Shares of Restricted Common Stock

Grantee:

Number of Shares:

Grant Date: , 20

The Grantee named above has been awarded restricted shares (the “Restricted Stock”) of the common stock, par value $.001 per share, of inVentiv Health, Inc. (the "Company"). This Notice of Grant outlines certain terms and conditions of the award. Additional terms and conditions of the award are contained in the inVentiv Health, Inc. 2006 Long-Term Incentive Plan (the “Plan”). The Restricted Stock is granted under and will be governed by terms of the Plan.

1. Rights as Stockholder. Subject to the terms of the award, from and after the Grant Date, the Grantee will have all of the rights of a stockholder with respect to the Restricted Stock, including the right to vote such shares of Restricted Stock and, subject to Section 7.3 of the Plan, the right to participate in all dividends and distributions with respect to the Company’s Common Stock; provided, however, that any additional shares of common stock or other securities that the Grantee may become entitled to receive pursuant to a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation, separation or reorganization or any other change in the capital structure of the Company will be subject to the same restrictions as the shares of Restricted Stock included in the award.

2. Restrictions; Delivery. (a) Until the Restricted Stock granted hereunder vests in accordance with Section 3 hereof, one or more stock certificates representing the unvested portion of the Restricted Stock will be issued in the Grantee's name, but will be held in custody by the Company or an escrow agent (which may be a brokerage firm) appointed by the Company. The Grantee will not be permitted to sell, transfer, assign, give, place in trust or otherwise dispose of or pledge, grant a security interest in or otherwise encumber unvested shares of Restricted Stock, other than by will or the laws of descent and distribution, and any such attempted disposition or encumbrance will be void and unenforceable against the Company, provided that the Grantee may assign or transfer unvested shares of Restricted Stock with the consent of the Committee to (a) the Grantee’s spouse, children or grandchildren (including any adopted and step children or grandchildren), (b) to a trust or partnership for the benefit of one or more of the Grantee or the persons referred to in clause (a), or (c) for charitable donations; provided that the recipient shall be bound by and subject to all of the terms and conditions of the Plan and this Agreement and shall execute an agreement satisfactory to the Company evidencing such obligations; and provided further that such Grantee shall remain bound by the terms and conditions of the Plan. Subject to applicable law, the Grantee may sell, transfer, assign, give, place in trust, or otherwise dispose of or pledge, grant a security interest in, or otherwise encumber vested shares of Restricted Stock.

(b) Subject to the provisions of this award, upon the vesting of any shares of Restricted Stock, the Company will deliver to the Grantee a certificate or certificates for the number of shares of Restricted Stock which have so vested. Alternatively, the Company may elect to deliver vested shares of Restricted Stock electronically, and if it does so, this award is conditioned upon the Grantee establishing an account with a brokerage firm selected by the Company for the purpose of receiving such shares.

3. Vesting of Restricted Stock. (a) The Restricted Stock will vest (and become non-forfeitable) as follows:

·   25% of the shares of Restricted Stock will vest on the first anniversary of the Grant Date;

·   25% of the shares of Restricted Stock will vest on the second anniversary of the Grant Date;

·   25% of the shares of Restricted Stock will vest on the third anniversary of the Grant Date; and

·   25% of the shares of Restricted Stock will vest on the fourth anniversary of the Grant Date.

(b) Any unvested shares of Restricted Stock will immediately become vested in the event that (i) (A) the Grantee is not nominated for reelection to the Board of Directors in connection with any stockholder meeting or consent pursuant to which directors are elected (other than by reason of the Grantee's resignation), unless the Grantee's term in office would not be affected by the election of the directors who are so nominated, (B) notwithstanding any such nomination, the Grantee is not reelected to the Board of Directors upon the expiration of the Grantee's term or (C) the Grantee is removed from the Board of Directors (in each case other than for Cause), (ii) there is a Change of Control with respect to the Company while the Grantee is a member of the Board of Directors or (iii) the Grantee dies or becomes disabled while the Grantee is a member of the Board of Directors. For purposes hereof, "Cause" means gross negligence, willful misconduct, breach of fiduciary duty or other matters determined by the Board to constitute cause upon notice to the Grantee.

4. Taxes. The Company will not withhold or pay any local, state or federal taxes on the Grantee's behalf. The Grantee shall be solely responsible for the payment of any such taxes.

5. Regulatory Compliance. The issuance and delivery of any stock certificates representing vested shares of Restricted Stock may be postponed by the Company for such period as may be required to comply with any applicable requirements under the federal securities laws or under any other law or regulation applicable to the issuance or delivery of such shares. The Company will not be obligated to deliver any vested shares of Restricted Stock to the Grantee if the Company believes that such delivery would constitute a violation of any applicable law or regulation.

6. Representations and Warranties. The Grantee is prohibited from selling vested shares of Restricted Stock other than pursuant to either (i) a registration statement on an appropriate form under the Securities Act of 1933, as amended (the “Securities Act”), which registration statement has become effective and is current with regard to the shares being sold, or (ii) if a registration statement covering the Restricted Stock is not effective at the time of issuance, a specific exemption from the registration requirements of the Securities Act that is confirmed in a favorable written opinion of counsel, in form and substance satisfactory to counsel for the Company, prior to any such sale or distribution, provided that the Company will not require opinions of counsel for transfers of shares of Restricted Stock made pursuant to Rule 144 if the Company is provided with any certificates or other evidence of compliance with Rule 144 reasonably required by it in connection with such transfer (including a copy of the relevant Form 144).

7. Legends. (a) Each certificate representing any unvested shares of Restricted Stock shall be endorsed with a legend in substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A CERTAIN RESTRICTED STOCK AWARD NOTICE, DATED AS OF (GRANT DATE), WHICH PROVIDES, AMONG OTHER THINGS, FOR CERTAIN RESTRICTIONS ON THE TRANSFER AND ENCUMBRANCE OF SUCH SHARES. A COPY OF SUCH NOTICE IS ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY

(b) In addition to the legend set forth in paragraph (a) and above, until registered under the Securities Act, each certificate representing shares of Restricted Stock shall be endorsed with a legend in substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT SUCH REGISTRATION, EXCEPT UPON DELIVERY TO THE COMPANY OF SUCH EVIDENCE AS MAYBE SATISFACTORY TO COUNSEL FOR THE COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER;

8. Miscellaneous.

(a) Construction. This award will be construed by and administered under the supervision of the Committee, and all determinations of the Committee will be final and binding on the Grantee.

(b) Dilution. Nothing in this award will restrict or limit in any way the right of the Board of Directors of the Company to issue or sell stock of the Company (or securities convertible into stock of the Company) on such terms and conditions as it deems to be in the best interests of the Company, including, without limitation, stock and securities issued or sold in connection with mergers and acquisitions, stock and securities issued or sold in connection with investments in the Company, stock issued or sold in connection with any stock option or similar plan, and stock issued or contributed to any qualified stock bonus or employee stock ownership plan.

(c) Dispute Resolution. Any controversy or claim arising out of or relating to this award will be submitted to arbitration under the auspices of the American Arbitration Association in accordance with its Commercial Dispute Resolution Procedures and Rules and at its office in Wilmington, Delaware. The award of the arbitrator will be final and binding upon the parties, and judgment may be entered with respect to such award in any court of competent jurisdiction. The award or decision rendered by the arbitrator will be final, binding and conclusive and judgment may be entered upon such award by any court of competent jurisdiction.

(d) Forfeiture of Restricted Stock. The Restricted Stock is subject to forfeiture upon a determination by the Committee that the Executive has engaged in any of the conduct described in the first sentence of Section 13.5 of the Plan and that the Restricted Stock should be forfeited as a consequence.

INVENTIV HEALTH, INC.

EX-10.5.1

AMENDMENT dated as of February 23, 2007 to the Employment Agreement dated as of May 9, 2006 (the “Agreement”) between inVentiv Health, Inc., a Delaware corporation, and Eran Broshy.

In consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties agree as follows:

Section 1.Bonus. Section 4 of the Agreement is hereby amended to read in its entirety as follows:

Executive shall be eligible for a bonus in each calendar year, based on Executive’s success in reaching or exceeding performance objectives as determined by the Board (the “Bonus”). Executive’s target Bonus shall be determined by the Board and shall be no less than 100% of Executive’s then current salary. The amount of the Bonus, if any, that is actually awarded shall be determined at the discretion of the Board. All or any portion of the Bonus may be awarded pursuant to a plan satisfying the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended.

Section 2.Ratification. Except as aforesaid, the Agreement shall remain in full force and effect in accordance with its terms.

Section 3.Governing Law. This Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of New York, without regard to its conflict of law principles.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and year first written above.

inVentiv Health, Inc. By: /s/ Per G.H. Lofberg Name: Per G.H. Lofberg Member, Compensation Committee of the Board of Directors	By: /s/ Eran Broshy Eran Broshy
By: /s/ Mark Jennings Name: Mark Jennings Member, Compensation Committee of the Board of Directors

EX-10.20

INCHORD COMMUNICATIONS, INC.

AMENDED AND RESTATED ACQUISITION-RELATED

INCENTIVE PLAN

1.   Purpose. The purpose of the inChord Communications, Inc. (the "Company") Amended and Restated Acquisition-Related Incentive Plan (this "Plan") is to promote the profitable growth of the Company by:

(a)   aligning the interests of the Company's shareholders and senior management team; and

(b)   providing a special cash bonus opportunity measured by the future growth in the earnings before interest and taxes ("EBIT") of the Company.

2.   Effectiveness. This Plan was approved by the Company's Board of Directors (the "Board") and will become operative immediately upon, and the Plan's effectiveness will be contingent upon, the closing (the "Effective Date") of a sale of all or substantially all of the capital stock or the assets and business of the Company to a third party strategic acquirer (the “Purchaser”) for consideration paid at closing of not less than $^[***] on or prior to September 1, 2006 (a "Sale Transaction").

3.   Administration. The responsibility to execute the provisions of this Plan is irrevocably delegated to the President of the Company (the "Plan Representative"), who is not a beneficiary hereunder. Absent manifest error, all determinations and decisions made by the Plan Representative will be final, conclusive and binding on all persons, including without limitation the Company, the Participants and their respective successors.

4.   Participants. Individual management employees of the Company identified by the Plan Representative (each, a "Participant") will be eligible to receive payments under this Plan, subject to Section 2 and the due execution and delivery by such Participant and the Company of an agreement in the form attached hereto as Annex A (the "Plan Joinder Agreement"). All awards under the Plan will be granted and all Plan Joinder Agreements will be executed and delivered to the Company on the same date.

5.   Incentive Pool Amount. Awards under this Plan will be earned based on [***]

the purpose of determining whether the Incentive Pool is funded will be made by the Plan Representative in his sole discretion in a manner consistent with and governed by the computation of such amounts under the operative agreements entered into by the Company in connection with any Sale Transaction and will be conclusive for purposes of the calculations made pursuant to this Plan.

6.   Individual Awards. Each Participant will be entitled to be paid ^[***]. Neither the Company nor the Purchaser, nor any officer, director or other representative thereof, makes any guarantee or representation to the Participants that any Final Award Amount will be realized. If a Participant engages in Triggering Conduct (as defined below) prior to December 31, 2007, the Incentive Pool will be reduced by the amount of such Participant's Final Award Amount that is forfeited pursuant to Section 10 but the Final Award Amounts of other Participants will continue to be calculated as provided above without giving effect to such reduction.

7.   Award Payments.

(a)   Within 15 days after the determination, the Final Award Amounts will be paid in cash, except that (i) up to 50% (the "Stock Cap Portion") of each Final Award Amount may, if the Purchaer’s common stock is traded on the New York Stock Exchange, the American Stock Exchange, The Nasdaq Stock Market or another securities exchange or interdealer quotation system, to the extent determined by the Purchaser in its sole discretion, be satisfied by the delivery to the applicable Participant of unregistered shares of common stock of the Purchaser (such shares, or shares received pursuant to Section 7(b), "Award Shares") having a Fair Market Value, determined as of the Determination Date, equal to such portion of the applicable Final Award Amount and (ii) subject to paragraphs (b) and (c) below, in no event will the Company be permitted to elect to satisfy a portion of any Final Award Amount with Award Shares if (the Company or the Purchaser (or, if applicable, the issuer of the Listed Equity Securities) has not taken all required measures with respect to the issuance thereof under applicable law or the rules or regulations of any exchange on which the common stock of the Purchaser (or, if applicable, the Listed Equity Securities) is then listed upon expiration of the restriction period specified in Section 7(c) below.

(b)   In the event of a merger, consolidation, recapitalization or other transaction to which the Purchaser is a party prior to the Determination Date and as a result of which outstanding shares of the Purchaser’s common stock are converted into the right to receive, in whole or in part, Listed Equity Securities (a "Conversion Transaction"), in lieu of the right of the Purchaser (whether or not then exercisable) to satisfy a portion of the Final Award Amounts by the delivery of common stock of the Purchaser pursuant to Section 7(a), up to the Stock Cap Portion of each Final Award Amount may be satisfied by the delivery to the applicable Participant of Listed Equity Securities of the issuer of the equity securities received by holders of common stock of the Purchaser in such Conversion Transaction having a Fair Market Value, determined as of the Determination Date, equal to such portion of such Final Award Amount. In the event that, in any such Conversion Transaction, outstanding shares of common stock of the Purchaser are converted into the right to receive equity securities that are not Listed Equity Securities (or are converted into the right to receive a combination of such equity securities and cash), then, unless such equity securities become Listed Equity Securities prior to the Determination Date, any Final Award Amounts will be required to be satisfied entirely in cash. In the event of a merger, consolidation, recapitalization or other transaction prior to the Determination Date as a result of which outstanding shares of common stock of the Purchaser are converted into the right to receive only cash, any Final Award Amounts will be required to be satisfied entirely in cash.

(c)   No Participant will sell, pledge, hedge or otherwise transfer any economic interest in any Award Shares prior to the first anniversary of the Determination Date.

(d)   Awards granted under this Plan will not be included in earnings for the purpose of calculating 401(k) plan benefits or for purposes of any other employee benefit plans.

8.   Vesting. Neither the termination of a Participant's employment with the Company or any Affiliate of the Company nor, subject to Sections 2 and 10, any other event will have any effect on such Participant's right to receive his or her Final Award Amount hereunder.

9.   Noncompetition, Nonsolicitation, Confidentiality and Assignment of Inventions. By executing the Plan Joinder Agreement, each Participant agrees to the following:

(a)   During the period of his or her employment (the “Employment Period”) by the Company or any other Company Entitiy (as defined below) (the "Employing Entity") and for a period of two years following termination of such employment for any reason, whether by his or her action or otherwise (the "Non-Competition Period"), such Participant will not, and he or she will cause his or her controlled Affiliates (as defined below) not to, be engaged anywhere in the world, directly or indirectly in any capacity whatsoever, including as an employee, officer, director or consultant, in the conduct of, or own any equity interest in, any business (regardless of form) that is competitive (other than in an immaterial way) with any business conducted by any Company Entity at any time during the Employment Period or any improvements or extensions thereof contemplated at any time during the Employment Period, including without limitation advertising, marketing and communications services on behalf of health care clients (a "Restricted Business"), provided that nothing herein will prohibit (i) such Participant in the aggregate together with all controlled Affiliates of such Participant, from passive ownership of up to 5% of the outstanding capital stock of any publicly traded company or (ii) such Participant from accepting employment with a Person who operates a diversified business that may include a Restricted Business or Restricted Business operations (other than during any period that such Participant may be employed by the Company or any other Company Entity) so long as the Participant does not engage in the management of or the direct or indirect provision of such services in any capacity whatsoever with respect to the Restricted Business or Restricted Business operations.

(b)   During the Non-Competition Period, he or she will not, and will cause his or her controlled Affiliates not to, directly or indirectly, induce or solicit, or aid or assist any Person to induce or solicit, any employees, independent contractors providing advertising or other operational services or customers of any Company Entity to terminate, curtail or otherwise limit their employment by or business relationship with any Company Entity; provided, however, that no Participant or other Person will be prohibited from hiring any such employee who (i) responds to a general solicitation of employment not specifically directed towards any Company Entity or particular employees of any Company Entity or (ii) has terminated employment with the Company Entities at least 12 months prior to such solicitation.

(c)   During the Non-Competition Period, he or she will not and will cause his or her controlled Affiliates not to (for his, her or its own benefit or the benefit of any person or entity other than the Company Entities) use or disclose any trade secrets or other confidential information of any Company Entity or those of any customer or client of any Company Entity other than as required in the course of performing his or her employment responsibilities. The term "trade secrets or other confidential information" includes, by way of example, matters of a business nature, such as proprietary information about costs, profits, markets, sales, lists of customers and other information of a similar nature and matters of a technical nature, "know-how," computer programs (including documentation of such programs) and research projects, including such materials constituting plans for future development. Notwithstanding the foregoing, (i) he or she may disclose such information (A) if the same currently is in the public domain or hereafter is in the public domain other than as a result of a breach of this Section 9(c) by such Participant or (B) if the same is later acquired by such Participant from another source and such Participant did not know that such source was under a contractual, legal or fiduciary obligation to another person to keep such information confidential and (ii) such Participant may disclose such of the foregoing information as is required by law (including by oral questions, interrogatories, requests for information or documents in legal proceedings, subpoena, civil investigative demand, rule of civil procedure or other similar process), or in connection with his preparation of tax returns or in response to tax audits or similar proceedings, so long as (x) such Participant provides the applicable Company Entity with prompt written notice of any disclosure (unless such information is disclosed solely by virtue of including such information in a tax return) so that such Company Entity may seek a protective order or other appropriate remedy or (y) with respect to any disclosure in connection with his or her preparation of tax returns or in response to tax audits or similar non-public proceedings, such disclosure is made on a confidential basis. Upon the effective date of any termination of such Participant's employment with the Employing Entity (whether by such Participant, the Employing Entity or by reason of death or disability), or at any time upon the request of the Employing Entity, he or she (or his or her heirs or personal representatives) will deliver to the Employing Entity all documents and materials containing trade secrets or other confidential information as described herein and all documents, materials and other property belonging to the Employing Entity or any other Company Entity which are in the possession or under the control of such Participant (or his or her heirs or personal representatives).

(d)   All discoveries and works made or conceived by such Participant during and in the course of his or her employment by the Employing Entity, jointly or with others, that relate to the activities of any Company Entity will be owned and assignable by the applicable Company Entity. The term "discoveries and works" includes, by way of example, inventions, computer programs (including documentation of such programs), technical improvements, processes, drawings and works of authorship, including all publications which relate to the business, operations or activities of any Company Entity or any customer or client of any Company Entity. He or she will promptly notify and make full disclosure to, and execute and deliver any documents requested by, the applicable Company Entity to evidence or better assure title to such discoveries and works by the applicable Company Entity, assist the applicable Company Entity in obtaining or maintaining, at the applicable Company Entity's expense, United States and foreign patents, copyrights, trade secret protection and other protection of any and all such discoveries and works, and promptly execute, whether during his or her employment or thereafter, all applications or other endorsements necessary or appropriate to maintain patents and other rights for the applicable Company Entity or its assignees and to protect its title thereto. Any discoveries and works which, within six months after the termination of such Participant's employment hereunder, are made, disclosed, reduced to a tangible or written form or description, or are reduced to practice by such Participant and which pertain to work performed by him or her while with, and in his or her capacity as an employee of, the Employing Entity will, as between such Participant and applicable Company Entity, be presumed to have been made during his or her employment by the Employing Entity.

(e)   For purposes hereof, (i) the "Company Entities" means the Company, each of the Company Subsidiaries and each person in which the Company holds a direct or indirect equity interest (whether or not a controlling interest) and (ii) a "controlled Affiliate" means, with respect to each Participant, any Person that directly or indirectly, through one or more intermediaries, is controlled by such Participant, alone or together with one or more other Participants or shareholders of the Company, where "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

(f)   Each Participant acknowledges and agrees that money damages would not be an adequate remedy for any breach of his or her agreements contained in this Section 9 and that, in addition to any other remedies available to any Company Entity, such Company Entity will be entitled to the remedies of injunction, specific performance and other equitable relief for any threatened or actual breach of the agreements contained in this Section 9 without any requirement that such Company Entity post a bond. The parties hereto agree that the provisions of this Section 9 are reasonable. If a court determines, however, that any provision of this Section 9 is unreasonable, either in period of time, geographical area or otherwise, then the parties hereto agree that the provisions of this Section 9 should be interpreted and enforced to the maximum extent which such court deems reasonable.

10.   Special Forfeiture/Repayment Rules.

(a)   If, prior to December 31, 2009, a Participant engages in Triggering Conduct, then (i) if the Triggering Conduct occurred prior to December 31, 2007, the Participant's entire participation herein will immediately terminate and be forfeited and no Final Award Amount will be paid to such Participant or (ii) if the Triggering Conduct occurred during 2008 or 2009, the Participant will, within 30 days following written notice from the Company, pay to the Company an amount equal to (A) if such Triggering Conduct occurred during 2008, in the case of any Triggering Conduct described in clause (i) of the definition of Triggering Conduct in the immediately succeeding paragraph, 100% of the Final Award Amount, and in the case of any other Triggering Conduct, 50% of the Final Award Amount, or (B) if such Triggering Conduct occurred during 2009, in the case of any Triggering Conduct described in clause (i) of the definition of Triggering Conduct, 75% of the Final Award Amount, and in the case of any other Triggering Conduct, 25% of the Final Award Amount .

(b)   As used herein, "Triggering Conduct" will mean (i) a breach by such Participant of the provisions of Section 9 of this Plan, (ii) the violation of any material policy of the Company or the Purchaser, including conduct which would constitute a breach of the then-most recent version of the Company's or the Purchaser's code of conduct, or (iii) any activity that results in a termination due to (A) the Participant's willful and continuous gross neglect of his or her duties for which he or she is employed, (B) the Participant willfully engaging in misconduct which is materially injurious to the Company or any of its Affiliates, (C) the Participant's conviction of a felony or any misdemeanor involving dishonesty, fraud or moral turpitude or the entry of a guilty or nolo contendere plea with respect thereto, or (D) the Participant's refusal or failure to follow the lawful directives of the Participant's designated superior or the Board of the Company within ten business days after written notice (or any shorter notice period reasonably necessary to avoid material harm to the Company or the Purchaser). 

11.   Investment Representations. Each Participant hereby represents and warrants that the Award Shares are being acquired for such Participant's own account, for investment purposes and not with a view to distribution thereof. Such Participant acknowledges and agrees that any sale or distribution of Award Shares may be made only pursuant to either (i) a registration statement on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), which registration statement has become effective and is current with regard to the shares being sold, or (ii) a specific exemption from the registration requirements of the Securities Act that is confirmed in a favorable written opinion of counsel, in form and substance satisfactory to counsel for the Purchaser, prior to any such sale or distribution, unless the Purchaser determines that such opinion of counsel is unavailable; provided, however, that the Purchaser will not require an opinion of counsel for transfers of Award Shares made pursuant to Rule 144 if the Purchaser is provided with any certificates or other evidence of compliance with Rule 144 reasonably required by it in connection with such transfer (including a copy of the relevant Form 144). Such Participant hereby consents to such action as the Purchaser deems necessary or appropriate from time to time to prevent a violation of, or to perfect an exemption from, the registration requirements of the Securities Act or to implement the provisions of this Plan, including but not limited to placing restrictive legends on certificates evidencing Award Shares and delivering stop transfer instructions to the Purchaser's stock transfer agent.

12.   Withholding of Taxes. Any payment made pursuant to this Plan will be less any applicable federal, state, local or foreign taxes.

13.   Service at Will. No provision of this Plan will confer upon a Participant any right to continue as an employee or consultant for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company or of the Participant, which rights are expressly reserved by each, to terminate the Participant's service to the Company at any time for any reason, with or without cause.

14.   Plan Duration; Amendment. Except for Sections 9 and 10 of this Plan, this Plan will terminate on the settlement date of all sums which become payable under this Plan (the "Plan Period"). Without limiting the generality or effect of any provision contained herein, this Plan may be amended at any time in any respect the Board deems necessary or advisable with the approval of the Plan Representative; provided, however, that if the rights and obligations of the Participants would be adversely affected, such amendment or amendments will not be effective (other than with respect to any Participant who consents thereto in writing) unless the amendments have been approved by the holders of a majority in amount of the Maximum Individual Awards payable hereunder and the Plan Joinder Agreements.

15.   Governing Law. The provision of this Plan will be governed by and construed in accordance with the laws of the State of Delaware without resort to that State's conflict of laws rules.

16.   Dispute Resolution. Any controversy or claim arising out of or relating to this Plan or the employment relationship between the Participant and the Employing Entity will be submitted to arbitration under the auspices of the American Arbitration Association in accordance with its Commercial Dispute Resolution Procedures and Rules and at its office in Wilmington, Delaware. The award of the arbitrator will be final and binding upon the parties, and judgment may be entered with respect to such award in any court of competent jurisdiction. Notwithstanding the foregoing, any controversy or claim arising out of or relating to any claim by the Company or any of its affiliates for temporary or preliminary relief with respect to Section 9 need not be resolved in arbitration. Such Participant acknowledges that this agreement to submit to arbitration includes all controversies or claims of any kind (e.g., whether in contract or in tort, statutory or common law, legal or equitable) now existing or hereafter arising under any federal, state, local or foreign law, including, but not limited to, the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, the Family and Medical Leave Act, the Employee Retirement Income Security Act and the Americans With Disabilities Act, and all similar state laws, and such Participant hereby waives all rights thereunder to have a judicial tribunal resolve such claims. The award or decision rendered by the arbitrator will be final, binding and conclusive and judgment may be entered upon such award by any court of competent jurisdiction.

17.   Non-Transferability. No rights under this Plan prior to the end of this Plan Period may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, or pursuant to a domestic relations order.

18.   Definitions. In addition to the terms defined elsewhere herein, as used in this Plan, the following terms have the meanings specified below when used in this Plan with initial capital letters:

(a)   "Affiliate" of any Person means another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with, such first Person, where "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

(b)   "Fair Market Value" means, with respect to any Award Share, the average closing bid price (or, if there is no applicable closing bid price, the closing price) of such Award Share on the principal exchange or interdealer quotation system on which such Award Share is traded over a period of 30 consecutive trading days, the latest of which will be the trading day immediately preceding the date as of which Fair Market Value is being determined.

(c)   "Listed Equity Securities" means equity securities that are traded on the New York Stock Exchange, the American Stock Exchange, The Nasdaq Stock Market or another securities exchange or interdealer quotation system that are registered or eligible for resale pursuant to Rule 144.

(d)   "Net Revenues" of the Company means the consolidated revenues of the Company and its Subsidiaries net of pass-through expenses, determined on a consistent basis between periods, determined in the same manner as, and using the same principles and policies used in calculating, the "Gross Profit" line item on the Consolidated Statement of Operations included in the Company’s audited, consolidated 2004 financial statements.

(e)   "Person" means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, Governmental Entity or other entity (including its permitted successors and assigns), where "Governmental Entity" means any federal, state, local or foreign government, court or administrative, regulatory or other governmental agency, commission or authority.

(f)   "Settlement Auditor" means the Wilmington, Delaware office of Grant Thornton LLP, or if such firm is unable or unwilling to serve as Settlement Auditor, such other nationally recognized independent auditing firm that the Purchaser and the Plan Representative may agree upon.

(g)   "Subsidiary" means, as to any Person, another Person whose financial condition and results of operations are required to be consolidated with those of the first Person under GAAP and also includes, with respect to the Company, RxPedite, LLC.

Executed as of ________ __, 2005.

INCHORD COMMUNICATIONS, INC.

By: _______________________

Name: _____________________

Title: ______________________

^[***] Confidential treatment requested. Omitted portions have been filed separately with the Securities and Exchange Commission.

^[***] Confidential treatment requested. Omitted portions have been filed separately with the Securities and Exchange Commission.

Annex A

INCHORD COMMUNICATIONS, INC.

500 Olde Worthington Road

Westerville, Ohio 43082

September __, 2005

To the Participant Named on

the Signature Page Hereto

Ladies and Gentlemen:

The parties wish to confirm the following mutual understandings with respect to certain aspects of the Amended and Restated Acquisition Related Incentive Plan (the "Plan") to be implemented in connection with a sale of all or substantially all of the capital stock or of the assets and business of the Company to a third party strategic acquirer for consideration paid at closing of not less than $^[***] on or prior to September 1, 2006.

1.Final Award Amount: Provided that the Net Revenue threshold set forth in the Plan is satisfied, the Maximum Individual Award for the Participant named herein is $_____________.

2.Terms of Plan: The Participant agrees that, as consideration for receiving his or her Final Award Amount, he or she accepts and agrees to the terms of the Plan and agrees to be bound by the obligations applicable to Participants thereunder, including without limitation Sections 9 and 10 thereof, which include limitations on competition, solicitation of employees and clients and provides for the forfeiture of rights in certain circumstances.

3.Continued Employment: As of the date hereof, the Participant has no plans to terminate his or her employment with the Company or any Company Subsidiary between the date hereof through the Plan Period, either independently or as a result of any Sale Transaction.

This document may be executed in counterparts.

[Signature Page Follows]

Sincerely,

INCHORD COMMUNICATIONS, INC.

By:

Duly Authorized

PARTICIPANT:

Name:

^[***] Confidential treatment requested. Omitted portions have been filed separately with the Securities and Exchange Commission.

EX-21.1

As of December 31, 2006, all of the below listed direct or indirect subsidiaries of inVentiv Health, Inc. and their direct and indirect subsidiaries will be, either directly or indirectly, 100% owned by inVentiv Health, Inc.

Legal Entity	Incorporation State	Country
Health Products Research, Inc.	New Jersey	US
Promotech Research Associates, Inc.	Colorado	US
Ventiv Commercial Services, LLC	New Jersey	US
Franklin Pharma Services, LLC	New Jersey	US
Pharmaceutical Resource Solutions LLC	Delaware	US
Medconference LLC	Delaware	US
DialogCoach LLC	Delaware	US
Ignite Health LLC	Delaware	US
Chamberlain Communications LLC	Delaware	US
Smith Hanley Holding Corp.	Delaware	US
Synergos LLC	Delaware	US
Smith Hanley Consulting Group, LLC	Delaware	US
MedFocus, LLC	Delaware	US
inVentiv Clinical Solutions LLC	Delaware	US
Smith Hanley Associates, LLC	Delaware	US
Anova Clinical Resources, LLC	Delaware	US
HHI Clinical & Statistical Research Services, LLC	Delaware	US
Adheris, Inc.	Delaware	US
InChord Holding Corporation	Delaware	US
inVentiv Communications, Inc.	Ohio	US
Gerbig, Snell Weisheimer Advertising, LLC	Ohio	US
Creative Healthcare Solutions, LLC	Ohio	US
Taylor Search Partners, LLC	Ohio	US
Blue Diesel, LLC	Ohio	US
Y Brand Outlook LLC	Ohio	US
Rxpedite LLC	Ohio	US
Cadent Medical Communications LLC	Ohio	US
Stonefly Communications Group LLC	Ohio	US
Navicor Group LLC	Ohio	US
InChord Global LLC	Ohio	US
The Center for Biomedical Continuing Education LLC	Ohio	US
InChord Group Limited		UK
Inchord, Limited LLC		UK
Kestrel Healthcare Limited		UK
Rapid Deployment Group Limited		UK
Ventiv Health Limited		UK
Ventiv Holdings (UK)		UK
Ventiv Pharma Services Canada, Inc.		Canada
inVentiv Canada ULC		Canada
inVentiv International B.V.		Netherlands
Pharmaceutical Resource Solutions of Puerto Rico, Inc.		Puerto Rico

EX-23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-90239, 333-117378, 333-120683 and 333-135691 on Form S-8 and Registration Statement No. 333-132483 on Form S-3 of our report dated February 27, 2007 (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the adoption of Statement of Financial Accounting Standards No. 123 (revised)), relating to the consolidated financial statements and financial statement schedule of inVentiv Health Inc. and management's report on the effectiveness of internal control over financial reporting, appearing in this Annual Report on Form 10-K of inVentiv Health Inc. for the year ended December 31, 2006.

/s/ Deloitte & Touche LLP

Parsippany, New Jersey

February 27, 2007

EX-31.1

Exhibit 31.1

CERTIFICATIONS

Certification Pursuant to Rule 13a-14(a) of the Exchange Act

I, Eran Broshy, certify that:

 1.  I have reviewed this annual report on Form 10-K of inVentiv Health, Inc.;

 2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 4.     The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 (a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 (c)   Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 (d)  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 5.    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

 (a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 (b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

February 28, 2007	By:	/s/ ERAN BROSHY
		Eran Broshy
		Chairman & Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

Certification Pursuant to Rule 13a-14(a) of the Exchange Act

I,  John R. Emery, certify that:

1.  I have reviewed this annual report on Form 10-K of inVentiv Health, Inc.;

 2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 4.     The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 (a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 (c)   Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 (d)  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 5.    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

 (a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 (b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

February 28, 2007	By:	/s/ JOHN R. EMERY
		John R. Emery
		Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of inVentiv Health, Inc. (the “Company”) on Form 10-K for the annual period ending December 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Eran Broshy, Chairman & Chief Executive Officer of inVentiv, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and to the best of my knowledge and belief, that:

(1)  The Report fully complies with the requirements of section 13 (a) or 15 (d) of the Securities Exchange Act of 1934 (16 U.S.C. 78m or 78o(d)); and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of inVentiv.

February 28, 2007	By:	/s/ ERAN BROSHY
		Eran Broshy
		Chairman & Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to inVentiv Health, Inc. and will be retained by inVentiv Health, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of inVentiv Health, Inc. (the “Company”) on Form 10-K for the annual period ending December 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John R. Emery, Chief Financial Officer of inVentiv, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and to the best of my knowledge and belief, that:

(1)  The Report fully complies with the requirements of section 13 (a) or 15 (d) of the Securities Exchange Act of 1934 (16 U.S.C. 78m or 78o(d)); and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of inVentiv.

February 28, 2007	By:	/s/ JOHN R. EMERY
		John R. Emery
		Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to inVentiv Health, Inc. and will be retained by inVentiv Health, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.