CVGR Covalent

Covalent Group, Inc. (Nasdaq: CVGR), a leader in the design, development, and management of complex clinical trials and patient registries for many of the world's leading pharmaceutical and biotechnology companies, today announced the signing of two new business contracts in cardiovascular disease that have an aggregate value of $1.5 million. Covalent will provide consulting services and clinical operations support on both of these early phase clinical trials, which are offering advanced therapeutic approaches to patients with severe heart failure. The first study utilizes gene therapy/transfer techniques in an attempt to correct a basic molecular abnormality present in patients with advanced heart failure. The second study uses transplantation of bone-marrow mononuclear stem cells as a means of potentially improving the conditions for heart failure patients who are ineligible for conventional means of therapy. These contracts are expected to begin in the current third quarter. Revenue recognition for both contracts will occur on a proportional performance basis as services are performed on the specific clinical trial. Kenneth M. Borow, M.D., Chief Executive Officer and President for Covalent Group, commented, "We pride ourselves in our ability to integrate consulting and operational services for the most complex clinical development programs for drugs, biologics, and medical devices. These two contracts continue this tradition, utilizing different but exciting cutting edge therapies for the treatment of patients with poor cardiac pump function. They nicely complement our already existing efforts in the field of pharmacogenomic targeting of therapies in patients with advanced heart failure. We are pleased that these clients, both of whom are new to Covalent, have chosen us as a strategic as well as operational partner in these innovative and important clinical development programs." Dr. Borow continued, "As previously announced, we expect the second quarter 2006 to represent a return to profitability for Covalent Group. We anticipate that our 2Q'06 net revenue will be at the upper end of our previous guidance of $3.0 - 3.4 million. This would represent a sequential increase in net revenue of over 70% compared to our first quarter 2006 net revenue." About Covalent Group, Inc. Covalent Group, Inc. is a clinical research organization that is a leader in the design and management of complex clinical trials and Patient Disease Registries for the pharmaceutical, biotechnology and medical device industries. The Company's mission is to provide its clients with high quality, full-service support for their biopharmaceutical development programs. Covalent offers therapeutic expertise, experienced team management and advanced technologies. The Company has drug and biologics development as well as clinical trial experience across a wide variety of therapeutic areas such as cardiovascular, endocrinology/metabolism, diabetes, vaccines, infectious diseases, gene therapy, immunology, neurology, oncology, gastroenterology, dermatology, hepatology, women's health and respiratory medicine. Covalent believes that its leadership in the design of complex clinical trials, its therapeutic expertise and commitment to excellence, and its application of innovative technologies, offer its clients a means to more quickly and cost effectively move products through the clinical development process. With its wholly-owned international subsidiary, Covalent Group, Ltd., Covalent is able to meet the North American and Western European drug development needs of its clients. For more information, please visit www.covalentgroup.com. This press release contains forward-looking statements identified by words such as "estimate," "project," "expect," "intend," "believe," "anticipate" and similar expressions. Actual results might differ materially from those projected in, expressed in or implied by the forward-looking statements. Potential risks and uncertainties that could affect the Company's future operating results and financial condition include, without limitation: (i) our success in attracting new business and retaining existing clients and projects; (ii) the size, duration, and timing of clinical trials we are currently managing may change unexpectedly; (iii) the termination, delay or cancellation of clinical trials we are currently managing could cause revenues to decline unexpectedly; (iv) the timing difference between our receipt of contract milestone or scheduled payments and our incurring costs to manage these trials; (v) outsourcing trends in the pharmaceutical, biotechnology and medical device industries; (vi) the ability to maintain profit margins in a competitive marketplace; (vii) our ability to attract and retain qualified personnel; (viii) the sensitivity of our business to general economic conditions; (ix) other economic, competitive, governmental and technological factors affecting our operations, markets, products, services and prices; (x) announced awards received from existing and potential customers are not definitive until fully negotiated contracts are executed by the parties;(xi) our backlog may not be indicative of future revenues and may not generate the revenues expected;(xii) our ability to successfully integrate the businesses of Covalent and Remedium and (xiii) the performance of the combined business to operate successfully and generate growth. You should not place any undue reliance on these forward looking statements which speak only as of the date of this press release. Additional information concerning factors that might affect our business or stock price which could cause actual results to materially differ from those in forward-looking statements is contained in Covalent Group's SEC filings, including its Annual Report on Form 10-K for the year ended December 31, 2005 and other periodic reports under the Securities Exchange Act of 1934, as amended, copies of which are available upon request from Covalent Group's investor relations department or The Equity Group Inc.