**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





Form
      10-Q





**[X]
      Quarterly Report Pursuant to Section 13 or 15(d) of the
      Securities**


Exchange
      Act of 1934





For
      the
      quarterly period ended March 31, 2007





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
      52-2181734


(State
      or
      other jurisdiction (IRS Employer


of
      incorporation or organization) Identification No.)





200
      Cottontail Lane


Vantage
      Court North


Somerset,
      New Jersey 08873


(Address
      of principal executive office and zip code)





(800)
      416-0555


(Registrant's
      telephone number, including area code)





Indicate
      by check mark whether 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 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]





Indicate
      the number of shares outstanding of each of the issuer's classes of common
      stock, as of the latest practicable date.





As
      of
      April 30, 2007, there were 31,123,947 outstanding shares of the registrant's
      common stock.











**INVENTIV
      HEALTH, INC.**


**INDEX
      TO QUARTERLY REPORT ON**


**FORM
      10-Q**





**Page****PART
                I. FINANCIAL INFORMATION**ITEM
                1. Financial StatementsCondensed
                Consolidated Balance Sheets as of March 31, 2007
                (unaudited)and
                December 31, 2006
            1Condensed
                Consolidated Income Statements for the three-monthsended
                March 31, 2007 and 2006 (unaudited)
            2Condensed
                Consolidated Statements of Cash Flows for the three-monthsended
                March 31, 2007 and 2006 (unaudited)
            3Notes
                to Condensed Consolidated Financial Statements
            4-13ITEM
                2. Management's Discussion and Analysis of Financial Condition
                andResults
                of Operations
            14
                - 18ITEM
                3. Quantitative and Qualitative Disclosures About Market
                Risk
            19ITEM
                4. Controls and Procedures
            19-20**PART
                II. OTHER INFORMATION**ITEM
                1. Legal Proceedings****
            20ITEM
                1A. Risk Factors
            20ITEM
                3. Unregistered Sales of Equity Securities and use of
                Proceeds
            20ITEM
                5. Other Information
            20-21ITEM
                6. Exhibits
            22**SIGNATURES**
            23











**PART
      I. FINANCIAL INFORMATION**


**ITEM
      1.**  ***Financial
      Statements***


**INVENTIV
      HEALTH, INC.**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


**(in
      thousands, except share and per share amounts)**


March
                31,
            December
                31,2007
            2006**ASSETS**Current
                assets:Cash
                and equivalents
            $46,257
            $79,835Restricted
                cash
            119
            50Accounts
                receivable, net of allowances for doubtful accounts of $3,521 and
                $3,583
                atMarch
                31, 2007 and December 31, 2006, respectively
            131,249
            124,283Unbilled
                services
            74,051
            75,691Prepaid
                expenses and other current assets
            15,215
            8,524Current
                tax assets
            492
            --Current
                deferred tax assets
            990
            834Total
                current assets
            268,373
            289,217Property
                and equipment, net
            43,661
            43,380Equity
                investments
            5,289
            5,076Goodwill
            277,857
            266,827Other
                intangibles, net
            173,459
            152,637Deposits
                and other assets
            14,093
            13,917Total
                assets
            $782,732
            $771,054**LIABILITIES
                AND STOCKHOLDERS’ EQUITY**Current
                liabilities:Current
                portion of capital lease obligations
            $11,621
            $11,708Borrowings
                under line of credit
            25,000
            --Current
                portion of long-term debt
            1,667
            1,667Accrued
                payroll, accounts payable and accrued expenses
            82,328
            123,175Current
                income tax liabilities
            --
            1,475Client
                advances and unearned revenue
            54,862
            64,508Total
                current liabilities
            175,478
            202,533Capital
                lease obligations, net of current portion
            19,787
            21,800Long-term
                debt
            162,500
            162,917Non-current
                income tax liabilities
            6,486
            --Deferred
                tax liabilities
            6,382
            6,756Other
                non-current liabilities
            8,563
            18,471Total
                liabilities
            379,196
            412,477Commitments
                and contingenciesMinority
                interests
            107
            115Stockholders’
                Equity:Preferred
                stock, $.001 par value, 10,000,000 shares authorized, none issued
                and
                outstanding atMarch
                31, 2007 and December 31, 2006, respectively
            --
            --Common
                stock, $.001 par value, 50,000,000 shares authorized; 31,032,406
                and
                29,975,710Shares
                issued and outstanding at March 31, 2007 and December 31, 2006,
                respectively
            31
            30Additional
                paid-in-capital
            318,887
            284,331Accumulated
                other comprehensive losses
            (286)
            (226)Accumulated
                earnings
            84,797
            74,327Total
                stockholders’ equity
            403,429
            358,462Total
                liabilities and stockholders’ equity
            $782,732
            $771,054


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


1


**INVENTIV
      HEALTH, INC.**


**CONDENSED
      CONSOLIDATED INCOME STATEMENTS**


**(in
      thousands, except per share amounts)**


**(unaudited)**


**For
                the Three-Months Ended March 31,****2007**
            **2006**Net
                revenues
            $176,390
            $142,938Reimbursable
                out-of-pockets
            45,565
            30,739Total
                revenues
            221,955
            173,677Operating
                expenses:Cost
                of services
            117,172
            95,115Reimbursed
                out-of-pocket expenses
            45,656
            29,693Selling,
                general and administrative expenses
            40,586
            29,986Total
                operating expenses
            203,414
            154,794Operating
                income
            18,541
            18,883Interest
                expense
            (3,562)
            (1,657)Interest
                income
            839
            734Income
                from continuing operations before income tax provision, minority
                interest
                in income of subsidiary and gain (loss) from equity
                investments
            15,818
            17,960Income
                tax provision
            (5,414)
            (7,184)Income
                from continuing operations before minority interest in income of
                subsidiary and gain (loss) from equity investments
            10,404
            10,776Minority
                interest in income of subsidiary
            (255)
            (323)Gain
                (loss) from equity investments
            235
            (310)Income
                from continuing operations
            10,384
            10,143Income
                from discontinued operations:Gains
                on disposals of discontinued operations, net of taxes
            86
            105Income
                from discontinued operations
            86
            105Net
                income
            $10,470
            $10,248Earnings
                per share (see Note 6):Continuing
                operations:Basic
            $0.34
            $0.36Diluted
            $0.33
            $0.35Discontinued
                operations:Basic
            $0.00
            $0.00Diluted
            $0.01
            $0.00Net
                income:Basic
            $0.34
            $0.36Diluted
            $0.34
            $0.35Weighted
                average common shares outstanding:Basic
            30,406
            28,199Diluted
            31,199
            29,359





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


2


**INVENTIV
      HEALTH, INC.**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**(in
      thousands)**


**(unaudited)**


**For
                the Three-Months Ended****March
                31,****2007**
            **2006**Cash
                flows from operating activities:Net
                income
            $10,470
            $10,248Income
                from discontinued operations
            (86)
            (105)Income
                from continuing operations
            10,384
            10,143Adjustments
                to reconcile net income to net cash provided by operating
                activities:Depreciation
            3,917
            3,774Amortization
            1,778
            1,048Gain
                (loss) from equity investments
            (235)
            310Minority
                interest in income of subsidiary
            255
            323Fair
                market value adjustment on derivative financial instrument
            (290)
            (1,717)Deferred
                taxes
            (530)
            919Stock
                compensation expense
            2,463
            1,602Tax
                benefit from stock option exercises and vesting of restricted
                shares
            2,967
            3,504Changes
                in assets and liabilities, net of effects from discontinued
                operations:Accounts
                receivable, net
            (2,323)
            31,906Unbilled
                services
            1,817
            (26,281)Prepaid
                expenses and other current assets
            (6,587)
            (1,319)Accrued
                payroll, accounts payable and accrued expenses
            (4,824)
            (5,863)Net
                tax liabilities
            3,588
            2,315Client
                advances and unearned revenue
            (9,646)
            (1,437)Excess
                tax benefits from stock based compensation
            (1,948)
            (3,331)Other
            (7,700)
            2,116Net
                cash (used in) provided by continuing operations
            (6,914)
            18,012Net
                cash provided by (used in) discontinued operations
            86
            (13)Net
                cash (used in) provided by operating activities
            (6,828)
            17,999Cash
                flows from investing activities:Restricted
                cash balances
            (69)
            2,814Investment
                in cash value of life insurance policies
            (1,654)
            (2,630)Cash
                paid for acquisitions, net of cash acquired
            (25,478)
            (42,443)Acquisition
                earn-out payments
            (20,667)
            (4,138)Equity
                investments
            22
            (62)Purchases
                of property and equipment
            (2,327)
            (2,737)Proceeds
                from manufacturers rebates on leased vehicles
            247
            69Net
                cash used in continuing operations
            (49,926)
            (49,127)Net
                cash provided by discontinued operations
            --
            118Net
                cash used in investing activities
            (49,926)
            (49,009)Cash
                flows from financing activities:Repayments
                on credit agreement
            (417)
            (438)Borrowings
                under line of credit
            25,000
            --Repayments
                on capital lease obligations
            (3,842)
            (3,461)Withholding
                shares for taxes
            (623)
            --Proceeds
                from exercise of stock options
            1,629
            2,378Excess
                tax benefits from stock-based compensation
            1,948
            3,331Distributions
                to minority interests in affiliated partnership
            (264)
            (258)Net
                cash provided by continuing operations
            23,431
            1,552Net
                cash provided by discontinued operations
            --
            --Net
                cash provided by financing activities
            23,431
            1,552Effect
                of exchange rate changes
            (255)
            219Net
                change in cash and equivalents
            (33,578)
            (29,239)Cash
                and equivalents, beginning of period
            79,835
            73,102Cash
                and equivalents, end of period
            $46,257
            $43,863Supplemental
                disclosures of cash flow information:Cash
                paid for interest
            $3,164
            $3,201Cash
                paid for income taxes
            $3,267
            $447Supplemental
                disclosures of non-cash activities:Vehicles
                acquired through capital lease agreements
            $3,066
            $5,619Stock
                issuance related to acquisitions
            $28,736
            $20,471





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





3


**INVENTIV
      HEALTH, INC.**


**NOTES
      TO CONDENSED 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. 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.





*Business
      Segments*





The
      Company currently serves our clients primarily through three business segments,
      which correspond to its reporting segments for 2007, as discussed in Note
      18:





·
            inVentiv
                Clinical,
                which provides services related to permanent placement, clinical
                staffing,
                data collection and management and functional service provision.
                This
                segment includes the Smith Hanley group of companies (which includes
                Smith
                Hanley Associates, Smith Hanley Consulting Group and MedFocus), HHI
                Clinical & Statistical Research Services (“HHI”), and Synergos, LLP
                ("Synergos").





·
            inVentiv
                Communications,
                which provides services related to pharmaceutical advertising, branding,
                interactive communication development, public relations, and patient
                and
                physician education. This segment includes inVentiv Communications,
                Inc.
                (then known as inChord Communications, Inc. ("inChord")), Adheris,
                Inc.
                ("Adheris"), Jeffrey Simbrow Associates ("JSAI"), ignite comm.net
                and
                Incendia Health, Inc. (collectively, “Ignite”) (acquired in March 2007)
                and Chamberlain Communications Group, Inc. (“Chamberlain”) (also acquired
                in March 2007).





·
            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 Pharma Teams, Analytics
                and Pharma Services.





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.**  **Basis
      of Presentation**





The
      accompanying unaudited condensed consolidated financial statements present
      the
      condensed consolidated balance sheets, condensed consolidated results of
      operations and condensed consolidated cash flows of the Company and its
      subsidiaries (the "condensed consolidated financial statements"). These
      condensed consolidated financial statements have been prepared pursuant to
      the
      rules and regulations of the United States Securities and Exchange Commission
      (“SEC”) related to interim financial statements. Accordingly, certain
      information and footnote disclosures normally included in financial statements
      prepared in accordance with accounting principles generally accepted in the
      United States of America ("GAAP") have been omitted. The Company
      believes that the disclosures made herein are adequate such that the information
      presented is not misleading. These condensed consolidated financial statements
      reflect all adjustments (consisting of only normal recurring adjustments) that,
      in the opinion of management, are necessary to fairly present the Company's
      condensed consolidated balance sheets as of March 31, 2007 and December 31,
      2006, the condensed consolidated income statements of the Company for the
      three-months ended March 31, 2007 and 2006 and the condensed consolidated cash
      flows for the three-months ended March 31, 2007 and 2006. Operating results
      for
      the three-months ended March 31, 2007 are not indicative of the results that
      may
      be expected for the year ending December 31, 2007.





4


**INVENTIV
        HEALTH, INC.**
 
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued**





The
      condensed 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.  As discussed above, the Company’s
      continuing operations consist primarily of three business segments: inVentiv
      Clinical, inVentiv Communications and inVentiv Commercial. All significant
      intercompany transactions have been eliminated in consolidation.





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. The results of this joint venture are not material to
      the
      Company’s condensed consolidated financial statements.





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 using the equity method of accounting. The results of these
      ownership interests are not material to the condensed consolidated financial
      statements.








**3.**  **Recently
      Issued Accounting Standards:**





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 if it will choose to measure any eligible
      financial assets and liabilities at fair value.





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 and 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 and 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 has adopted 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 are accounted for as a cumulative-effect
      adjustment recorded to the beginning balance of retained earnings. The adoption
      of FIN 48 did not have a material impact on the Company’s consolidated
      statements of operations, financial position, cash flows, and other significant
      matters, such as debt covenants or the Company’s normal business practices.








5


**INVENTIV
        HEALTH, INC.**
 
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued**
    **Acquisitions:**





Acquisitions
      are accounted for using purchase accounting, including SFAS No. 141, *Business
      Combinations* ,
      (“SFAS
      No. 141”) and the financial results of the acquired businesses are included in
      the Company’s financial statements from their acquisitions dates. If a business
      is acquired subsequent to a reporting period, but prior to the issuance of
      the
      Company’s financial statements, it is disclosed in the notes to the consolidated
      financial statements. Earn-out payments from acquisitions are generally accrued
      in conjunction with the preparation of the Company’s fourth quarter financial
      statements when the divisional results are finalized, as more fully described
      below.





**Ignite** - In
      March 2007, the Company completed the acquisition of Ignite for approximately
      $21.2 million in cash and stock, including certain post-closing adjustments
      and
      direct acquisition costs which have yet to be finalized. The Company will be
      obligated to make certain earn-out payments, which may be material, contingent
      on Ignite's performance measurements during 2007 through 2010. Ignite is based
      in Irvine, California, and specializes in medical advertising and interactive
      communications targeting patients and caregivers. Ignite’s financial results
      were included in the condensed consolidated financial statements within the
      Communications’ segment from the acquisition date to March 31, 2007. 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 Ignite was not material to the consolidated
      operations of the Company.




**Chamberlain** - In
      March 2007, the Company completed the acquisition of Chamberlain for
      approximately $14.6 million in cash and stock, including certain post-closing
      adjustments and direct acquisition costs which have yet to be finalized. The
      Company 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
      included in the condensed consolidated financial statements within the
      Communications’ segment from the acquisition date to March 31, 2007. 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 Chamberlain was not material to the
      consolidated operations of the Company.




**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 certain post-closing
      adjustments and direct acquisition costs. 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
      accrued at December 31, 2006, and paid in 2007, with respect to MedConference
      for the 2006 earnout was approximately $1.6 million in cash and stock. The
      results of MedConference have been reflected in the inVentiv Commercial segment
      since the date of its acquisition.





**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 certain post-closing adjustments and direct
      acquisition costs. 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; DialogCoach
      did
      not achieve the initial earnout threshold for 2006 and thus, no amount was
      accrued. The results of DialogCoach have been reflected in the inVentiv
      Commercial segment since the date of its acquisition.





**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 accrued at December 31, 2006,
      and
      paid in 2007, with respect to Synergos for the 2006 earnout, was approximately
      $0.8 million in cash and stock. The results of Synergos have been reflected
      in
      the inVentiv Clinical segment from the date of its acquisition.





6


**INVENTIV
        HEALTH, INC.**
 
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued**
   - 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 amount due with respect to
      JSAI for the 12-month period ended March 31, 2007 is expected to be
      approximately $2.8 million in cash and stock, which the Company accrued at
      March
      31, 2007, but is subject to review mechanisms set forth in the acquisition
      agreement and may change materially based on such review. The results of JSAI
      have been reflected in the inVentiv Communications segment from the date of
      its
      acquisition.





**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. 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. Adheris’s 2006 earnout of
      approximately $7.6 million in cash and stock, of which $7.9 million was accrued
      at December 31, 2006, was paid in 2007. The portion adjusted in the subsequent
      year mainly relates to the finalization of the earn-out for the previous year,
      as allowed under the contract. The results of Adheris have been reflected in
      the
      inVentiv Communications segment from the date of its acquisition.





**inVentiv
      Communications, Inc.** -
      In
      October 2005, the Company acquired all of the outstanding capital stock of
      inVentiv Communications, Inc. for approximately $196.8 million of cash and
      stock, including certain post-closing adjustments and direct acquisition costs.
      To help finance the transaction, the Company entered into a Credit Agreement,
      dated October 5, 2005, as more fully described in footnote 9. 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 approximately $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 relates to the finalization
      of the earn-outs for the previous year, as allowed under the contract. inVentiv
      Communications, Inc.’s 2006 earnout of approximately $24.7 million in cash and
      stock, of which $25.0 million was accrued for at December 31, 2006, was paid
      in
      2007. The results of inVentiv Communications, Inc. have been reflected in the
      inVentiv Communications segment since the date of acquisition.





**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, including certain post-closing adjustments and direct
      acquisition costs. The Company was obligated to make certain earn-out payments
      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. PRS’ 2006 earnout of
      approximately $2.0 million in cash and stock, of which $1.7 million was accrued
      at December 31, 2006, was paid in 2007. The portion adjusted in the subsequent
      year mainly relates to the finalization of the earn-out for the previous year,
      as allowed under the contract. The results of PRS have been reflected in the
      inVentiv Commercial segment since the date of acquisition.





**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, including certain
      post-closing adjustments and direct acquisition costs. 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. HHI’s 2006 earn-out of $5.0
      million in cash and stock, of which $5.1 million was accrued at December 31,
      2006, was paid in 2007. The portions adjusted in the subsequent years mainly
      relate to the finalization of the earn-outs for the respective years. The
      results of HHI have been reflected in the inVentiv Clinical segment since the
      date of acquisition.





7


**INVENTIV
        HEALTH, INC.**
 
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued**
   - 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 closing consideration for the transaction was approximately
      $52.9 million in cash and stock, including certain post-closing adjustments
      and
      direct acquisition costs. The Company 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, including certain post-closing adjustments
      and
      direct acquisition costs. The Company was obligated to make certain earn-out
      payments 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. Franklin’s 2006 earnout, finalized in March 2007, was
      approximately $2.3 million in cash and stock, of which approximately $1.8
      million was accrued at December 31, 2006. The portions adjusted in the
      subsequent years mainly relate to the finalization of the earn-outs for the
      respective years. Franklin’s financial results have been reflected in the
      inVentiv Commercial segment since the date of acquisition.




**5.**  **Employee
      Stock Compensation:**




In
      December 2004, the 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 stock-based compensation expense of $2.5
      million, of which $0.6 million was recorded in cost of services and $1.9 million
      recorded as Selling, General and Administrative expenses (“SG&A”) for the
      three months ended March 31, 2007 and $1.6 million, of which $0.6 million was
      recorded in cost of services and $1.0 million recorded as SG&A for the three
      months ended March 31, 2006. The stock-based compensation expense caused income
      before income tax provision, minority interest in income of subsidiary and
      income from equity investments to decrease by $2.5 million and $1.6 million
      for
      the three months ended March 31, 2007 and 2006, respectively, net income to
      decrease by $1.5 million and $1.0 million for the three months ended March
      31,
      2007 and 2006, respectively, and basic and diluted earnings per share to
      decrease by $0.05 per share and $0.03 per share for the three months ended
      March
      31, 2007 and 2006, respectively. Cash provided by financing activities increased
      by $1.9 million and $3.3 million for the three-months ended March 31, 2007
      and
      2006, respectively, related to excess tax benefits from the exercise of
      stock-based awards.





8


**INVENTIV
        HEALTH, INC.**
 
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued**





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:





**Three
                Months Ended**
              **March
                31,****2007**
            **2006**Expected
                life of option
            5.5-6yrs
            5.5-6
                yrsRisk-free
                interest rate
            4.77%
            4.72%Expected
                volatility
            40%
            45%Expected
                dividend yield
            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. The
      Company analyzed historical trends in these variables on a quarterly basis,
      resulting in an increase in the Company’s expected volatility to 40% during the
      first quarter of 2007 from 39% during the fourth quarter of 2006. For the
      quarter ended March 31, 2007 the Company elected to use the simplified method
      of
      determining the expected term as permitted by SAB 107 and 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, 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
      rates utilized for first quarter 2007 and 2006 were 3.25% and 2.82%,
      respectively.








Stock
      Incentive Plan and Award Activity





As
      of
      June 14, 2006, the Company’s 2006 Stock Incentive Plan (“Stock Plan”) authorizes
      it to grant incentive stock options, nonqualified stock options, restricted
      stock awards, restricted stock units and stock appreciation rights ("SARs”). 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 Stock Plan 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.


9


**INVENTIV
      HEALTH, INC.**





**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued**




The
      following table summarizes activity under the Company’s equity incentive plans
      for the three months ended March 31, 2007 (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, 2007
            2,194
            $14.43Granted
                and assumed
            113
            $35.01Exercised
            (192)
            $8.46Forfeited/expired/cancelled
            (8)
            $14.32Outstanding
                at March 31, 2007
            2,107
            $16.08
            7.18
            $46,791Vested
                and expected to vest at March 31, 2007
            2,025
            $15.79
            7.13
            $45,570Options
                exercisable at March 31, 2007
            1,129
            $10.66
            6.20
            $31,202




The
      weighted-average grant-date fair value of stock options granted during the
      three-months ended March 31, 2007 and 2006 were $16.25 and $11.86 per share,
      respectively. The total intrinsic value of options exercised during the
      three-months ended March 31, 2007 and 2006 was $1.6 million and $2.4 million,
      respectively. As of March 31, 2007 and December 31, 2006, there was
      approximately $10.3 million and $8.9 million, respectively, 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 2.5 years and 2.4 years, respectively.






The
      actual tax benefit realized for the tax deductions from option exercise of
      the
      share-based payment arrangements totaled $2.0 million and $3.5 million for
      the
      three months ended March 31, 2007 and 2006, respectively.




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
            $2.01
            210,950
            $1.67
            5.68
            210,950
            $1.67$2.08
            To
            $7.94
            232,062
            $4.72
            5.04
            229,287
            $4.72$8.06
            To
            $9.15
            212,687
            $8.28
            4.73
            162,625
            $8.22$10.30
            To
            $15.48
            54,426
            $13.38
            7.01
            24,376
            $12.66$15.96
            To
            $15.96
            382,500
            $15.96
            7.48
            282,500
            $15.96$16.86
            To
            $17.25
            274,777
            $17.05
            7.49
            88,025
            $16.94$17.57
            To
            $25.06
            316,811
            $21.45
            8.08
            98,876
            $20.91$25.62
            To
            $26.77
            274,500
            $26.69
            8.93
            26,625
            $26.44$30.64
            To
            $30.64
            35,000
            $30.64
            9.39
            5,832
            $30.64$35.01
            To
            $35.01
            113,416
            $35.01
            9.81
            --
            $--2,107,129
            
            
            1,129,096







10


**INVENTIV
      HEALTH, INC.**





**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
      Continued**




A
      summary
      of the status and changes of the Company’s nonvested shares related to our
      equity incentive plans as of and during the three months ended March 31, 2007
      is
      presented below:





(in
                thousands, except per share amounts)
            **Shares**
            **Weighted
                Average Grant-**
              **Date
                Fair Value**Nonvested
                at January 1, 2007
            520
            $24.66Granted
            253
            $35.22Released
            (74)
            $23.36Forfeited
            (7)
            $26.43Nonvested
                at March 31, 2007
            692
            $28.48




As
      of
      March 31, 2007 and December 31, 2006, there was approximately $17.7 million
      and
      $9.2 million, respectively, 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 3.4 years
      and
      3.3 years, respectively. The total fair value of shares vested during the
      three-months ended March 31, 2007 and 2006 were $1.0 million and $0.6 million,
      respectively.







**6.**  **Earnings
      Per Share (“EPS”):**





Basic
      earnings per share excludes dilution for potentially dilutive securities and
      is
      computed by dividing net income or loss attributable to common shareholders
      by
      the weighted average number of common shares outstanding during the
      period.  Diluted net income per share reflects 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 net income 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:





**Three-Months
                Ended March 31,****2007**
            **2006****Basic
                EPS from Continuing Operations Computation**Income
                from continuing operations
            $10,384
            $10,143Weighted
                average number of common shares outstanding
            30,406
            28,199Basic
                EPS from continuing operations
            $0.34
            $0.36**Diluted
                EPS from Continuing Operations Computation**Income
                from continuing operations
            $10,384
            $10,143Weighted
                average number of common shares outstanding
            30,406
            28,199Stock
                options(1)
            636
            1,081Restricted
                stock awards(2)
            157
            79Total
                diluted common shares outstanding
            31,199
            29,359Diluted
                EPS from continuing operations
            $0.33
            $0.35




(1) For the
      three-months ended March 31, 2007 and 2006, 301,120 and 37,331 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
      three-months ended March 31, 2007 and 2006, 413 and 818 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.





**7.**  **Significant
      Clients:**





During
      the three-months ended March 31, 2007 the Company had one client that accounted
      for more than 10%, individually, of the Company's total revenues across our
      inVentiv Clinical, inVentiv Communications and inVentiv Commercial segments.
      For
      the three-months ended March 31, 2006 there were no clients that accounted
      for
      more than 10%, individually, of the Company's total revenues.








11





**INVENTIV
      HEALTH, INC.**





**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued**








.  **Goodwill
      and Other Intangible Assets:**





Goodwill
      consists of the following:





(in
                thousands)
            **January
                1,**
              **2007**
            **Acquisitions**
            **Contingent****(1)**
              **Consideration**
            **March
                31,**
              **2007**inVentiv
                Clinical
            $55,742
            $12
            $(133)
            $55,621inVentiv
                Communications
            157,863
            8,095
            2,214
            168,172inVentiv
                Commercial
            53,222
            34
            808
            54,064Total
            $266,827
            $8,141
            $2,889
            $277,857


(1)
            The
                contingent consideration represents adjustments relating to the
                finalization of the earnouts for the twelve months ended March 31,
                2007
                and December 31, 2006. (see Note
                4)




Other
      intangible assets consist of the following:





**March
                31, 2007**
            
            **December
                31, 2006**(in
                thousands)
            
            **Accumulated**
            
            
            
            **Accumulated****Gross**
            **Amortization**
            **Net**
            
            **Gross**
            **Amortization**
            **Net**Customer
                relationships
            $74,787
            $(8,783)
            $66,004
            
            $59,987
            $(7,240)
            $52,747Noncompete
                agreement
            880
            (421)
            459
            
            880
            (372)
            508Tradenames
                subject to amortization
            911
            (104)
            807
            
            911
            (66)
            845Other
            2,600
            (471)
            2,129
            
            2,600
            (323)
            2,277Total
                definite-life intangibles
            79,178
            (9,779)
            69,399
            
            64,378
            (8,001)
            56,377Tradenames
                not subject to amortization(1)
            104,060
            --
            104,060
            
            96,260
            --
            96,260Total
                other intangibles(2)
            $183,238
            $(9,779)
            $173,459
            
            $160,638
            $(8,001)
            $152,637





(1)
            These
                indefinite-life tradenames arose primarily from the acquisitions
                of
                Franklin, Smith Hanley, HHI, inChord, Adheris, Chamberlain and Ignite,
                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.


(2)
            The
                $22.6 million increase in total gross other intangibles arises from
                the
                acquisitions of Chamberlain and
                Ignite.





The
      acquisitions discussed in Note 4 resulted in approximately $257.3 million of
      goodwill and the following gross intangible assets:





**Intangible
                asset**
            
            **Amount**
              **(in
                thousands)**
            **Weighted
                average amortization period**Tradename
            
            $104,971
            (1)Customer
                relationships
            
            74,787
            10.9
                yearsNoncompete
                agreement
            
            880
            4.1
                yearsTechnology
            
            2,340
            7.2
                yearsTotal
            
            $182,978
            (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
                2004-2007 acquisitions.




Amortization
      expense, based on intangibles subject to amortization held at March 31, 2007,
      is
      expected to be $6.0 million for the remainder of 2007, $8.0 million in 2008,
      $7.5 million in 2009, $7.1 million in 2010, $7.0 million in 2011, $6.6 million
      in 2012 and $27.1 million thereafter.





The
      Company performed its most recent annual impairment test 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 March
      31, 2007, based on various factors, including updated forecasts and the current
      condition of the Company.





**9.**  **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 theinVentiv
                Communications, Inc.transaction. The credit agreement also includes a $50 million revolving
                credit facility, $5 million 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.




The
      three-month LIBOR base rate as of March 31, 2007 and December 31, 2006 was
      5.35%
      and 5.36%, respectively. As disclosed in Note 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
      $2.6 million and $2.7 million are included as Deposits and Other Assets on
      the
      March 31, 2007 and December 31, 2006 condensed 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 March
      31,
      2007 and December 31, 2006, the Company had approximately $164.2 million and
      $164.6 million outstanding on the secured term loan and $25.0 million at March
      31, 2007 outstanding under the credit facility.





**10.**  **Capital
      Lease Obligations:**





Starting
      in 2000, the Company entered into various lease agreements to provide a fleet
      of
      automobiles for sales representatives of its inVentiv Commercial Services
      operating segment. Based on the terms of these agreements, management concluded
      that the leases were capital leases based on the criteria established by SFAS
      No. 13, *Accounting
      for Leases* .
      The
      Company capitalized leased vehicles and recorded the related lease obligations
      totaling approximately $3.3 million (including rebates of $0.2 million) and
      $5.7
      million (including rebates of $0.1 million) during the three-months ended March
      31, 2007 and 2006, respectively. The Company also incurred net disposals of
      $2.0
      million and $1.6 million during the three-months ended March 31, 2007 and 2006,
      respectively.





**11.**  **Derivative
      Financial Instrument:**





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 inChord. The Company entered into this
      interest rate swap agreement to modify the interest rate characteristics of
      its
      outstanding long-term debt. At 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).





From
      October 2005 to July 2006, the Company did not designate 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 Condensed
      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 model to measure ineffectiveness.
      The hypothetical derivative contains the same terms and conditions as the
      original derivative, but was initiated in July 2006. During the first quarter
      of
      2007, the fair market value of the derivative asset decreased by $0.5 million
      to
      approximately $0.7 million. Approximately $0.3 million of the $0.5 million
      adjustment was recorded as interest expense due to ineffectiveness, while the
      remaining $0.2 million ($0.1 million, net of taxes) was recorded as a decrease
      to Other Comprehensive Income.





**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. Certain
      such
      claims that are pending against Adheris are described in Part I, Item 3 of
      the
      Company's Annual Report on Form 10-K for the fiscal year ended December 31,
      2006. With the exception of the claims described therein, all pending matters
      are of a kind routinely experienced in our business and are consistent with
      our
      historical experience. In the opinion of management and based on the advice
      of
      legal counsel, no matters outstanding as of March 31, 2007 are likely to have
      a
      material adverse effect on inVentiv.





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 was recorded in cost of services and $2.3 million was
      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.**  **Deferred
      Compensation:**





On
      November 22, 2004, inVentiv adopted the Ventiv Health, Inc. Deferred
      Compensation Plan (the "Plan"), which was approved by inVentiv’s 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
      the Company or an affiliated employer participating in the Plan. The
      compensation deferrals were initiated in 2005. The deferred compensation
      liability of approximately $5.2 million and $4.2 million was included in other
      non-current liabilities in the Company’s Condensed Consolidated Balance Sheets
      as of March 31, 2007 and December 31, 2006. The Plan does not provide for the
      payment of above-market interest to participants.





To
      assist
      in the funding of the Plan obligation, the Company participates in a
      corporate-owned life insurance program in a rabbi trust whereby it purchases
      life insurance policies covering the lives of certain employees, with the
      Company 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 at March 31, 2007 and December 31,
      2006 was approximately $4.6 million and $2.9 million, respectively, and is
      currently classified in Deposits and Other Assets on the Company’s Condensed
      Consolidated Balance Sheets. In addition, approximately $0.7 million and $1.1
      million as of March 31, 2007 and December 31, 2006, respectively, were invested
      in mutual funds and classified in Prepaid expenses and other current assets
      on
      our Condensed Consolidated Balance Sheets.





**14.**   **Income
      Taxes**


In
        March
        2007, the Company recorded a tax benefit of approximately $1.0 million related
        to federal tax benefits of state tax reserves. Excluding this one-time tax
        benefit, inVentiv recorded a provision for income taxes on continuing operations
        using an estimated effective tax rate of 40.7% for the quarter ended March
        31,
        2007. The Company’s effective tax rate was 40.0% for the quarter ended March 31,
        2006. The Company’s current effective tax rate is based on current projections
        for earnings in the tax jurisdictions in which inVentiv does business and
        is
        subject to taxation. The Company’s effective tax rate could fluctuate due to
        changes in earnings between operating entities and related tax
        jurisdictions.
 
 During
        the quarter ended March 31, 2007, the Company recorded $4.5 million of
        additional tax reserves, interest and penalties related to pre-acquisition
        tax
        exposures in addition to offsetting assets supported by tax indemnity
        agreements.
 
 The
        Company adopted the provisions of FASB Interpretation No. 48, Accounting
        for
        Uncertainty in Income Taxes (FIN 48), on January 1, 2007. The adoption of
        FIN 48
        did not have a material impact on the Company’s consolidated balance sheet,
        results of operations and cash flows. As of January 1, 2007, the amount of
        unrecognized tax benefits was $2.5 million. Included in this balance at January
        1, 2007 are $1.6 million of tax positions that, if recognized, would affect
        the
        effective tax rate.
 
 The
        Company recognizes potential interest and penalties related to unrecognized
        tax
        benefits in income tax expense. The total amount of accrued interest and
        penalties recorded as of January 1, 2007 was $1.2 million. During the three
        months ended March 31, 2007, the Company recognized approximately $0.1 million
        in potential interest associated with uncertain tax positions.
 
 The
        Company or one of its subsidiaries files income tax returns in the U.S. federal
        jurisdiction, and various states and foreign jurisdictions. The Company is
        no
        longer subject to US federal income tax examinations for years before 2003
        and
        generally, is no longer subject to state and local income tax examinations
        by
        tax authorities for years before 2002.
 
 Management
        has concluded that it is reasonably possible that the unrecognized tax benefits
        will decrease by approximately $1.1 million within the next 12 months. The
        decrease is primarily related to additional federal and state taxes that
        may be
        settled or have expiring statutes of limitations.


12


**INVENTIV
      HEALTH, INC.**





**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
      Continued**





**15.**   **Stockholders’
      Equity**




The
      following table describes the 2007 activity in the Company’s Stockholders’
Equity accounts for the three-months ended March 31, 2007:




Common
                Stock
            Additional
                Paid-In
              Capital
            Accumulated
                earnings
            Compre-hensive
              Income
            Accumulated
                Other Comprehen-sive Losses (1)
            TotalBalance
                at December 31, 2006
            $30
            $284,331
            $74,327
            
            ($226)
            $358,462Net
                income
            
            
            10,470
            $10,470
            
            10,470Net
                change in effective portion of derivative, net of taxes
            
            
            
            (123)
            (123)
            (123)Foreign
                currency translation
              Adjustment
            
            
            
            63
            63
            63$10,410Restricted
                stock expense
            
            1,186
            
            
            
            1,186Withholding
                shares for taxes
            
            (623)
            
            
            
            (623)Tax
                benefit from exercise of employee stock options and vesting of restricted
                stock
            
            2,036
            
            
            
            2,036Consultant
                compensation
            
            316
            
            
            
            316Proceeds
                from exercise of stock options
            
            1,629
            
            
            
            1,629Stock
                option expense
            
            1,277
            
            
            
            1,277Issuance
                of shares in connection with acquisitions
            1
            28,735
            
            
            
            28,736Balance
                at March 31, 2007
            $31
            $318,887
            $84,797
            
            $(286)
            $403,429





(1)
      As of
      March 31, 2007 Accumulated Other Comprehensive Losses consists of $0.5 million
      of currency translation fluctuations in the foreign bank accounts remaining
      from
      the divestitures of inVentiv’s European business units and the Company’s equity
      investments and minority interests in inVentiv Communications’ foreign business
      units as well as approximately ($0.8 million, net of taxes) that relates to
      the
      effective portion of the Company’s derivative instrument, as described in Note
      11.





**16.**  **Discontinued
      Operations:**





For
      the
      three months ended March 31, 2007 and 2006, earnings from discontinued
      operations, net of taxes, were approximately $0.1 million for both periods.
      The
      gains on disposals of discontinued operations consisted of contingency payments
      due from the Company’s previously-divested Germany-based unit.








**17.**  **Related
      Parties:**





The
      Company is currently in a lease with Olde Worthington Road LLC for inVentiv
      Communications’ 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 service
                provision





·
            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.







Segment
      information for the three-months ended March 31, 2007 is as follows (in
      thousands):





**inVentiv**
              **Clinical**
            **inVentiv
                Communications**
            **inVentiv
                Commercial**
            **Other**
            **Total**Revenues
            $41,444
            $80,389
            $102,503
            $--
            $224,336Less:
                Intersegment revenues
            (3)
            (225)
            (2,153)
            --
            (2,381)Reported
                Revenues
            $41,441
            $80,164
            $100,350
            $--
            $221,955Depreciation
                and amortization
            441
            1,512
            3,720
            22
            5,695Interest
                expense
            --
            4
            500
            3,058
            3,562Interest
                income
            21
            241
            --
            577
            839Segment
                income (loss) (1)
            $1,851
            $11,897
            $8,514
            $(6,444)
            $15,818








Segment
      information for the three-months ended March 31, 2006 is as follows (in
      thousands):





**inVentiv**
              **Clinical**
            **inVentiv
                Communications**
            **inVentiv
                Commercial**
            **Other**
            **Total**Revenues
            $32,470
            $52,578
            $89,805
            --
            $174,853Less:
                Intersegment revenues
            (34)
            (127)
            (1,015)
            --
            (1,176)Reported
                Revenues
            $32,436
            $52,451
            $88,790
            --
            $173,677Depreciation
                and amortization
            312
            867
            3,622
            21
            4,822Interest
                expense
            --
            11
            399
            1,247
            1,657Interest
                income
            12
            127
            --
            595
            734Segment
                income (loss) (1)
            1,327
            8,711
            11,112
            (3,190)
            17,960








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




(in
                thousands)
            
            **March
                31**
            **Dec
                31****2007**
            
            **2006**Total
                Assets:inVentiv
                Clinical
            
            $
            107,431
            
            $
            $105,253inVentiv
                Communications
            
            
            422,480
            
            
            408,859inVentiv
                Commercial
            
            
            199,518
            
            
            192,975Other
            
            
            53,303
            
            
            63,967Total
                assets
            
            $
            782,732
            
            $
            771,054







13


**ITEM
      2.**  ***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
      the
      Annual Report on Form 10-K for the years ended December 31, 2006, 2005 and
      2004.





*Overview*





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. 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. 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. 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.




We
      currently serve our clients primarily through three business
      segments:





·
            inVentiv
                Clinical,
                which provides services related to permanent placement, clinical
                staffing,
                data collection and management and functional service provision.
                This
                segment includes the Smith Hanley group of companies (which includes
                Smith
                Hanley Associates, Smith Hanley Consulting Group and MedFocus), HHI
                Clinical & Statistical Research Services (“HHI”), and Synergos, LLP
                ("Synergos").





·
            inVentiv
                Communications,
                which provides services related to pharmaceutical advertising, branding,
                interactive communication development, public relations, and patient
                and
                physician education. This segment includes inVentiv Communications,
                Inc.
                (then known as inChord Communications, Inc. ("inChord")), Adheris,
                Inc.
                ("Adheris"), Jeffrey Simbrow Associates ("JSAI"), ignite comm.net
                and
                Incendia Health, Inc. (collectively, “Ignite”) (acquired in March 2007)
                and Chamberlain Communications Group, Inc. (“Chamberlain”) (also acquired
                in March 2007).





·
            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 Pharma Teams, Analytics
                and Pharma Services.





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 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 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. 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.







*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 acquired Ignite and Chamberlain,
      as highlighted in the table below. 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
            March
                2007Chamberlain
            Public
                relations
            Communications
            New
                York
            March
                2007MedConference
            Virtual
                event services
            Commercial
            Pennsylvania
            November
                2006DialogCoach
            Education
                and training
            Commercial
            Pennsylvania
            November
                2006JSAI
            Marketing
                and communications agency
            Communications
            Ontario,
              Canada
            April
                2006Synergos
            Clinical
                trial management services
            Clinical
            Texas
            April
                2006Adheris
            Patient
                pharmaceutical compliance
            Communications
            Massachusetts
            February
                2006inChord
            Advertising
                and communications services
            Communications
            Ohio
            October
                2005PRS
            Regulatory
                compliance
            Commercial
            Pennsylvania
            August
                2005HHI
            Data
                management and statistical analyses
            Clinical
            Maryland
            November
                2004Smith
                Hanley
            Contract
                staffing and clinical trial support
            Clinical
            Connecticut
            October
                2004Franklin
            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.





**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. The results of this joint venture are not
      material to the Company’s condensed consolidated financial statements. 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.








*Critical
      Accounting Policies*





The
      Company’s critical accounting policies are set forth in its Annual Report on
      Form 10-K for the year ended December 31, 2006. There has been no change, update
      or revision t


o
      the
      Company’s critical accounting policies subsequent to the filing of the Company’s
      Form 10-K for the year ended December 31, 2006.











**Three-Months
      Ended March 31, 2007 Compared to Three-Months Ended March 31,
      2006**





**Results
      of Operations**





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




**For
                the Three-Months Ended March 31,****2007**
            **2006****(in
                thousands, except for per share data)**Revenues:
            
            Percentage(1)
            
            Percentage(1)inVentiv
                Clinical
            $41,441
            18.7%
            $32,436
            18.7%inVentiv
                Communications
            80,164
            36.1%
            52,451
            30.2%inVentiv Commercial
            100,350
            45.2%
            88,790
            51.1%Other
            --
            --
            --
            --Total
                revenues
            221,955
            100.0%
            173,677
            100.0%Cost
                of services(1)
                (2):inVentiv
                Clinical
            29,032
            70.1%
            22,844
            70.4%inVentiv
                Communications
            52,416
            65.4%
            32,166
            61.3%inVentiv Commercial
            81,380
            81.1%
            69,798
            78.6%Other
            --
            --
            --
            --Total
                cost of services
            162,828
            73.4%
            124,808
            71.9%Selling,
                general and administrative expenses
            40,586
            18.3%
            29,986
            17.3%Total
                operating income
            18,541
            8.3%
            18,883
            10.9%Interest
                expense
            (3,562)
            (1.6)%
            (1,657)
            (1.0)%Interest
                income
            839
            0.4%
            734
            0.4%Income
                from continuing operations before income tax provision,
              minority
                interest in income of subsidiary and income from equity
              investments
            15,818
            7.1%
            17,960
            10.3%Income
                tax provision
            (5,414)
            (2.4)%
            (7,184)
            (4.1)%Income
                from continuing operations before minority interest in
              income
                of subsidiary and income from equity investments
            10,404
            4.7%
            10,776
            6.2%Minority
                interest in subsidiary
            (255)
            (0.1)%
            (323)
            (0.2)%Gain
                (loss) from equity investments
            235
            0.1%
            (310)
            (0.2)%Income
                from continuing operations
            10,384
            4.7%
            10,143
            5.8%Income
                from discontinued operations:Gains
                on disposals of discontinued operations, net of taxes
            86
            0.0%
            105
            0.1%Income
                from discontinued operations
            86
            0.0%
            105
            0.1%Net
                income
            $10,470
            4.7%
            $10,248
            5.9%Earnings
                per share:Continuing
                operations:Basic
            $0.34
            
            $0.36Diluted
            $0.33
            
            $0.35Discontinued
                operations:Basic
            $0.00
            
            $0.00Diluted
            $0.01
            
            $0.00Net
                earnings:Basic
            $0.34
            
            $0.36Diluted
            $0.34
            
            $0.35





(1)
            Cost
                of services is expressed as a percentage of segment revenue. All
                other
                line items are displayed as a percentage of total
                revenues.


(2)
            Cost
                of services includes reimbursed out of pocket
                expenses.


14





***Revenues*** :
      Revenues increased by approximately $48.3 million, or 28%, to $222.0 million
      during the first quarter of 2007, from $173.7 million during the first quarter
      of 2006.




inVentiv
      Clinical’s revenues were $41.4 million during the first quarter of 2007, an
      increase of $9.0 million compared to $32.4 million during the first quarter
      of
      2006. inVentiv Clinical revenues accounted for 19% of total inVentiv revenues
      during the first quarter of 2007. Revenues in the clinical staffing division
      were higher in 2007 predominantly due to increased placement of temporary
      personnel. The acquisition of Synergos in April 2006 also contributed
      approximately $1.0 million of revenues for the first quarter of 2007.




inVentiv
      Communications’ revenues were $80.2 million during the first quarter of 2007, an
      increase of $27.7 million or 53% from the first quarter of 2006. inVentiv
      Communications’ revenues accounted for 36% of total inVentiv revenues during the
      first quarter of 2007. Approximately $18 million of this increase is due to
      the
      incremental revenue relating to the acquisitions of Adheris, JSAI, Ignite and
      Chamberlain over the past 13 months. The remaining increase primarily relates
      to
      recent business wins in various advertising and communications’
agencies.




Revenues
      in our inVentiv Commercial segment were $100.4 million during the first quarter
      of 2007, an increase of $11.6 million, or 13% from the $88.8 million during
      the
      first quarter of 2006. inVentiv Commercial revenues accounted for 45% of total
      inVentiv revenues for the first quarter of 2007. Most of the variance relates
      to
      new business wins, which more than offset revenues that wound-down in the
      natural course. Approximately $2 million of this increase was due to the
      incremental revenue relating to the acquisitions of Medconference and
      DialogCoach, both acquired during the fourth quarter of 2006.





***Cost
      of Services*** :
      Cost of
      services increased by approximately $38.0 million or 30%, to $162.8 million
      during the first quarter of 2007 from $124.8 million in the first quarter of
      2006. Cost of services as a percentage of revenues increased to 73% during
      the
      first quarter of 2007 from 72% during the first quarter of 2006. The majority
      of
      this increase is due to increased business in all three segments, as described
      above.





inVentiv
      Clinical’s cost of services increased by approximately $6.2 million, or 27%, to
      $29.0 million during the first quarter of 2007 from $22.8 million during the
      first quarter of 2006. This increase is consistent with the increase in the
      segment’s revenue. Cost of services as a percentage of revenues remained
      consistent at 70% for both periods.





inVentiv
      Communications’ cost of services increased by 63% to $52.4 million during the
      first quarter of 2007 when compared to the first quarter of 2006. Most of this
      variance is due to increased business described above. Cost of services as
      a
      percentage of the segment’s revenues increased from 61% during the first quarter
      of 2006 to 65% during the first quarter of 2007 primarily due to the timing
      of
      additional reimbursable income and expense for the first quarter of 2007.





Cost
      of
      services at inVentiv Commercial increased by approximately $11.6 million, or
      17%, to $81.4 million in the first quarter of 2007 from $69.8 million in the
      first quarter of 2006, mainly due to the increase in revenues. Cost of services
      was 81% of inVentiv Commercial revenues during the first quarter of 2007,
      compared to 79% during the first quarter of 2006, mainly due to the timing
      of
      additional reimbursable income and expense for the first quarter of 2007.





***Selling,
      General and Administrative Expenses (“SG&A”)*** :
      SG&A expenses increased by approximately $10.6 million, or 35%, to $40.6
      million during the first quarter of 2007 from $30.0 million during the first
      quarter of 2006.




SG&A
      expenses at inVentiv Clinical were approximately $10.6 million during the first
      quarter of 2007, compared to $8.3 million during the first quarter of 2006
      due
      to increased selling expense and commissions from additional business;
      additional staffing requirements; and additional SG&A expense from Synergos,
      which was acquired in April 2006.






SG&A
      expenses at inVentiv Communications increased $4.4 million to $16.1 million
      during the first quarter of 2007. New acquisitions contributed to almost all
      of
      this increase.






SG&A
      expenses at inVentiv Commercial increased by approximately $2.5 million, or
      33%,
      to $10.0 million during the first quarter of 2007 from $7.5 million during
      the
      first quarter of 2006. This increase was mainly due to annual increases in
      equity and non-equity compensation, and SG&A from the new inVentiv
      Commercial divisions acquired during the fourth quarter of 2006.






Other
      SG&A was approximately $4.0 million for the first quarter of 2007, an
      increase of approximately $1.5 million or 56% from $2.5 million during the
      first
      quarter of 2006. The increase was mainly related to additional, ongoing audit
      fees arising as a result of new acquisitions. In addition, there were annual
      increases in equity and non-equity compensation expense from the previous year.




15




***Interest
      Expense:*** Interest
      expense increased by approximately $1.9 million from the first quarter of 2006
      to the first quarter of 2007. For the three months ended March 31, 2006, the
      Company did not designate for hedge accounting and recorded a $1.7 million
      reduction to interest expense relating to the mark-to-market adjustment required
      to record hedge ineffectiveness to earnings, and a corresponding derivative
      asset of approximately $1.7 million. In July 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,* resulting
      in $0.3 million of additional interest expense due to
      ineffectiveness.




***Provision
      for Income Taxes*** : In
      March
      2007, inVentiv recorded a tax benefit of approximately $1.0 million related
      to
      federal tax benefits of state tax reserves. Excluding this one-time tax benefit,
      inVentiv recorded a provision for income taxes on continuing operations using
      an
      estimated effective tax rate of 40.7% for the quarter ended March 31, 2007.
      The
      Company’s effective tax rate was 40.0% for the quarter ended March 31, 2006. Our
      current effective tax rate is based on current projections for earnings in
      the
      tax jurisdictions in which inVentiv does business and is subject to taxation.
      Our effective tax rate could fluctuate due to changes in earnings between
      operating entities and related tax jurisdictions.





***Net
      Income and Earnings Per Share (“EPS”)*** *:* inVentiv’s net income increased by approximately $0.3 million to $10.5 million
      during the first quarter of 2007 from net income of $10.2 million during the
      first quarter of 2006, respectively. Diluted earnings per share decreased to
      $0.34 per share during the first quarter of 2007 from $0.35 per share during
      the
      first quarter of 2006.  Although net income slightly increased, overall EPS
      decreased because of increased shares issued relating to new acquisitions,
      earnouts, and annual employee equity grants.






















































































16


**Liquidity
      and Capital Resources**





At
      March
      31, 2007, inVentiv had $46.3 million of unrestricted cash and equivalents,
      a
      decrease of $33.5 million from December 31, 2006. For the three-months ended
      March 31, 2006 compared to March 31, 2007, cash used in operations decreased
      by
      $24.8 million from a source of $18.0 million to a use of $6.8 million. Cash
      used
      in investing activities increased from $49.0 million to $49.9 million for the
      three-months ended March 31, 2006 and 2007, respectively. Cash provided by
      financing activities increased from $1.6 million to $23.4 million over the
      same
      comparative periods.





Cash
      used
      in operations was $6.8 million during the three-months ended March 31, 2007,
      while cash provided by operations was $18.0 million in the three-months ended
      March 31, 2006. This decrease was, in large part, due to the timing of certain
      payments due under various contracts. The accounts receivable and unbilled
      services balances increased by approximately $0.5 million during the first
      quarter of 2007, versus a decrease of approximately $5.6 million during the
      first quarter of 2006. This is mainly due to timing of increased collections
      during the first quarter of 2006. In addition, unearned revenue decreased more
      substantially mainly due to more significant projects completed in the
      Communications’ segment during the first quarter of 2007.





Cash
      used
      in investing activities was $49.9 million for the three-months ended March
      31,
      2007 compared to $49.0 million used during the same period in 2006. During
      the
      three months ended March 31, 2006, the Company paid approximately $42.4 million
      of cash, net of cash acquired, for the acquisition of Adheris, and approximately
      $4.1 million of cash relating to earnout contingency payments from previous
      acquisitions. During the three months ended March 31, 2007, approximately $25.5
      million of cash related to the acquisitions of Ignite and Chamberlain, while
      approximately $20.7 million of cash related to earnout contingency payments
      from
      previous acquisitions.





Cash
      provided by financing activities was $23.4 million for the three months ended
      March 31, 2007, compared to $1.6 million for the three-months ended March 31,
      2006. As discussed below, during the three months ended March 31, 2007, $25
      million was borrowed from the revolving credit facility to help finance the
      Ignite and Chamberlain acquisitions and 2006 earnout payments from past
      acquisitions.





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 March
      31,
      2007, 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
                and
                a $5 million swingline facility. In March 2007, the Company borrowed
                $25
                million from this revolving credit facility to help finance the Ignite
                and
                Chamberlain acquisitions, and 2006 earnout payments from past
                acquisitions. As of April 30, 2007, $10 million of this borrowing
                was
                repaid. The remaining $15 million is being borrowed at the current
                one-month LIBOR rate.






·
            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.





17


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, 2006
      and
      2007 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 Note 4 to our condensed consolidated
      financial statements included in Part I, Item 1 of this Form 10-Q.





**Contractual
      Obligations**





During
      2007, we acquired Ignite for approximately $20 million in cash and stock and
      Chamberlain for approximately $13 million in cash and stock (in each case
      excluding direct acquisition costs and post-closing adjustments). Pursuant
      to
      the related acquisition agreements, we will be obligated to make certain earnout
      payments, which may be material, contingent on the financial performance of
      the
      acquired businesses during 2007 and in subsequent years, as described more
      fully
      in Note 4 to our condensed consolidated financial statements included in Part
      I,
      Item 1 of this Quarterly Report on Form 10-Q.





With
      the
      foregoing exceptions, there have been no material changes, outside the ordinary
      course of business, in our outstanding contractual obligations from those
      disclosed within “Management’s Discussion and Analysis of Financial Condition
      and Results of Operations” in our Annual Report on Form 10-K for the year ended
      December 31, 2006.





**Off-Balance
      Sheet Arrangements**





As
      of
      March 31, 2007, we did not have any off-balance-sheet arrangements, as defined
      in Item 303(a)(4)(ii) of SEC Regulation S-K.





**Forward-Looking
      Statements**





This
      Quarterly Report on Form 10-Q, including this Management’s Discussion and
      Analysis of Financial Condition and Results of Operations, 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
                expectations regarding our pursuit of additional debt or equity sources
                to
                finance our internal growth initiatives or acquisitions;
                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;





·  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 matters discussed
      under Item 1A, Risk Factors, of the Company’s Form 10-K for the year ended
      December 31,


2006.


18




**ITEM
      3.** ***Quantitative
      and Qualitative Disclosures About Market Risk*** ****





**Long-Term
      Debt Exposure**





At
      March
      31, 2007, we had $164.2 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 our
      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 March 31, 2007, 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, 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 inChord. The Company entered into this
      interest rate swap agreement to modify the interest rate characteristics of
      its
      outstanding long-term debt. At 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).





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 Condensed
      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 model to measure ineffectiveness.
      The hypothetical derivative contains the same terms and conditions as the
      original derivative, but was initiated in July 2006. During the first quarter
      of
      2007, the fair market value of the derivative asset decreased by $0.5 million
      to
      approximately $0.7 million. Approximately $0.3 million of the $0.5 million
      adjustment was recorded as interest expense due to ineffectiveness, while the
      remaining $0.2 million ($0.1 million, net of taxes) was recorded as a decrease
      to Other Comprehensive Income.





**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 our 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 March 31, 2007, the accumulated other comprehensive earnings related
      to foreign currency translations was approximately $0.5 million. Foreign
      currency transaction gains and (losses) are included in the results of
      operations and are not material.





**ITEM
      4.** ***Controls
      and Procedures***




Based
      on
      their evaluation as of March 31, 2007, our Chief Executive Officer and Chief
      Financial Officer have concluded that our disclosure controls and procedures
      (as
      defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act
      of 1934, as amended (the "Exchange Act"))) were effective as of March 31, 2007
      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 SEC, and that material information relating to
      the
      Company and its consolidated subsidiaries is made known to management, including
      the Chief Executive Officer and Chief Financial Officer, particularly during
      the
      period when our periodic reports are being prepared. There were no changes
      in
      our internal controls over financial reporting during the quarter ended March
      31, 2007 that have materially affected, or are reasonably likely to materially
      affect, our internal controls over financial reporting.




19


Our
      management, including the Chief Executive Officer and Chief Financial Officer,
      does not expect that our Disclosure Controls or 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, have been detected. These inherent limitations include the realities
      that judgments in decision-making can be faulty and that breakdowns can occur
      because of simple error or mistake. Controls can also be circumvented by the
      individual acts of some persons, by collusion of two or more people, or by
      management override of the controls. 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.




**PART
      II.**  **OTHER
      INFORMATION**





**ITEM
      1.**  ***Legal
      Proceedings*** ****





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. Certain
      such
      claims that are pending against Adheris are described in Part I, Item 3 of
      the
      Company's Annual Report on Form 10-K for the fiscal year ended December 31,
      2006. With the exception of the claims described therein, all pending matters
      are of a kind routinely experienced in our business and are consistent with
      our
      historical experience.





**ITEM
      1A.**  ***Risk
      Factors*** ****





There
      have been no material changes in the risk factors discussed in Item 1A of the
      Company’s Form 10-K for the year ended December 31, 2006.





**ITEM 3.** ***Unregistered
      Sales of Equity Securities and Use of Proceeds.***





On
      March
      19, 2007, the Company issued 20,854 unregistered shares of its Common Stock,
      par
      value $0.001 per share (“ Common
      Stock ”)
      to the
      former equityholders of its Franklin Pharma Services business unit, 21,439
      unregistered shares of Common Stock to the entity from which its MedConference
      business unit was acquired and 16,271 unregistered shares of Common
      Stock to the
      former equityholders of its Pharmaceutical Resource Solutions business unit,
      in
      each case pursuant to the earnout provisions of the relevant acquisition
      agreement. The issuance of the foregoing shares of Common Stock was exempt
      from
      registration pursuant to Section 4(2) of the Securities Act of 1933, as
      amended.  In each case, there was no general solicitation or advertising,
      the number of recipients of such unregistered shares was limited and such
      recipients are accredited and/or sophisticated.








**ITEM 5.** ***Other
      Information***





Election
      of R. Blane Walter as President of the Company




On
      May 7,
      2007, our Board of Directors elected R. Blane Walter, age 36, as the President
      of the Company. Mr. Walter has served as the President and Chief Executive
      Officer of our inVentiv Communications division since the acquisition of inVentiv
      Communications, Inc. (known
      as inChord Communications, Inc. at the time of the acquisition) in October
      2005
      and as a director of the Company since October 2005. Mr. Walter joined inVentiv
      Communications, Inc. as an
      Account Manager in 1994. In 1996, he became a Partner and later purchased the
      company in 2000. Under his direction as Chairman and CEO, inVentiv
      Communications, Inc. became the largest privately-held healthcare communication
      company in the world, with affiliates throughout the world. Prior to
      inVentiv Communications, Inc., Mr. Walter worked as a financial analyst in
      New
      York City for Smith Barney in mergers and acquisitions. Mr. Walter will assume
      responsibility as President of the Company no later than July 1, 2007. The
      Company intends to disclose when finalized any modifications to Mr. Walter's
      compensation arrangements related to his appointment as President.





20


inVentiv
      Communications, Inc. is
      party
      to a lease with Olde Worthington Road LLC for its current headquarters facility
      in Westerville, Ohio. This facility is partially owned by Mr. Walter, his
      brothers and other current employees of inVentiv Communications, Inc. through
      their ownership in GSW Capital LLC. GSW Capital LLC is a 50% owner of Olde
      Worthington Road LLC. The lease expires on September 30, 2015. The total
      value, on an undiscounted basis, of rental payments to be made from January
      1,
      2006 through maturity is estimated to be $11.8 million and Mr. Walter's interest
      in this payment stream is approximately $9.8 million. The entry by inVentiv
      Communications, Inc. into this lease preceded our acquisition of inVentiv
      Communications, Inc. and, accordingly, Mr. Walter was not an executive officer
      or director of the Company at such time. The existence and terms of the lease
      were disclosed to the Board of Directors in connection with its approval of
      the
      acquisition of inVentiv Communications, Inc.





Resignation
      of John Emery as Chief Financial Officer of the Company; Election of David
      Bassin as Chief Financial Officer





On
      May 7,
      2007, John Emery, our Chief Financial Officer, resigned all of his positions
      with the Company and its subsidiaries effective May 11, 2007. Also on May 7,
      the
      Board of Directors elected David Bassin, age 35, currently the Chief Financial
      Officer and Chief Operating Officer of our inVentiv Commercial Services
      division, as the Chief Financial Officer of the Company effective May 11, 2007.
      In connection with his appointment as Chief Financial Officer of the Company,
      the Company and Mr. Bassin executed an amendment to his existing employment
      agreement and equity award documentation pursuant to which (i) Mr. Bassin's
      annual base salary was increased from $221,055 to $290,000; (ii) Mr. Bassin's
      contractual bonus range was changed from 0-70% to 0-100%, with a 50% target
      bonus, (iii) a change in control payment of up to 52 weeks of base salary was
      reinstated, (iv) the Company agreed to reimburse Mr. Bassin for country club
      dues of approximately $8,000 annually and (v) the Company confirmed that
      previously issued equity awards covering 19,835 stock options and 12,092 shares
      of restricted stock would accelerate upon Mr. Bassin's termination without
      cause
      within six months of a change in control of the Company.





The
      following is a brief description of Mr. Bassin's business experience:





David
      Bassin, CFO and COO for inVentiv Commercial, is responsible for providing
      financial, strategic and operational management for all of the inVentiv
      Commercial divisions. He oversees accounting/finance, information technology,
      fleet and the strategic development for the operations. In addition, Mr. Bassin
      leads the financial due diligence and integration for newly acquired
      subsidiaries and the insurance/risk management for the organization. After
      a
      career as an auditor with Arthur Andersen, Mr. Bassin entered the pharmaceutical
      sales and marketing industry in 1997 as the Business and Financial Strategies
      Group Manager for Snyder Communications, a former parent company to inVentiv
      Health. He was responsible for post-acquisition integrations of subsidiaries
      that provided sales force, CRA and other marketing services to pharmaceutical
      companies in Europe. After assisting with investor relations and securing
      financing for the spin-off of Ventiv Health from Snyder Communications, Mr.
      Bassin led the financial planning and analysis group in the preparation of
      company-wide budgets, forecast and statistics for quarterly reports. He also
      acted as the financial director, performing financial modeling of partnerships
      for pharmaceutical and biotech products in late-stage development prior to
      his
      present role. Mr. Bassin earned a bachelor's degree in economics and business
      from Lafayette College and is a Certified Public Accountant.








Election
      of Terrell Herring as Chief Operating Officer of the Company





On
      May 7,
      2007, our Board of Directors elected Terrell Herring, age 43, as the Chief
      Operating Officer of the Company, in addition to his role as President and Chief
      Executive Officer of
      inVentiv Commercial. In connection with his appointment as Chief Operating
      Officer of the Company, the Company and Mr. Herring executed an amendment to
      his
      existing employment agreement and equity award documentation pursuant to which,
      effective July 1, 2007, with respect to clauses (i) through (iv) and
      immediately, with respect to clause (v)): (i) Mr. Herring's annual base salary
      was increased from $375,000 to $425,000; (ii) Mr. Herring was guaranteed a
      minimum annual bonus of $150,000 for 2007, subject to being employed by the
      Company on December 31, 2007, (iii) Mr. Herring's right to payment upon a
      termination without cause or for good reason was clarified to provide that
      a
      6-month base salary continuation benefit would be payable commencing on the
      first anniversary of the termination and subject to Mr. Herring refraining
      from
      engaging in competitive business activities, (iv) provision was made for
      payment, in connection with a termination of employment by Mr. Herring with
      the
      concurrence of certain other senior officers of the Company, of a lump sum
      payment of 6 months of base salary in lieu of any payment that would otherwise
      be triggered by a termination without cause or for good reason and (v) the
      Company confirmed that previously issued equity awards covering 136,523 stock
      options and 36,225 shares of restricted stock would accelerate upon Mr.
      Herring's termination without cause within six months of a change in control
      of
      the Company. Mr. Herring will assume responsibility as Chief Operating Officer
      of the Company no later than July 1, 2007.





Mr.
      Herring has served as the President and Chief Executive Officer of our inVentiv
      Commercial division since October 2005 and as a
      director of the Company since October 2005 .
      Since
      joining the Company in November 1999, Mr. Herring has held the positions of
      National Business Director, Vice President and General Manager, U. S. Sales,
      President and COO, inVentiv Pharma Services and President and COO, inVentiv
      Commerical. He has more than 20 years experience in the pharmaceutical sales
      industry. Before joining inVentiv, Mr. Herring was the Senior National Sales
      Director at Noven Pharmaceuticals where he focused on transdermal delivery
      and
      women's health marketing. He began his career at Ciba-Geigy Pharmaceuticals
      and
      Solvay Pharmaceuticals where he held various sales management, training,
      development, marketing, and operations positions.





21





**ITEM
      6.**  ***Exhibits***


10.11.2
              
              Amendment
                  dated June 15, 2004 to Employment Agreement dated April 8, 2002
                  by and
                  between Terrell Herring and the Registrant10.11.3
              
              Amendment
                  dated October 18, 2004 to Employment Agreement dated April 8, 2002
                  by and
                  between Terrell Herring and the Registrant10.11.4
              
              Amendment
                  dated January 23, 2006 to Employment Agreement dated April 8, 2002
                  by and
                  between Terrell Herring and the Registrant10.11.5
              
              Amendment
                  dated May 9, 2007 to Employment Agreement dated April 8, 2002 by
                  and
                  between Terrell Herring and the Registrant10.21
              
              Employment
                  Agreement dated January 1, 2003 by and between David Bassin and
                  the
                  Registrant10.21.1
              
              Amendment
                  dated April 1, 2003 to Employment Agreement dated January 1, 2003
                  by and
                  between David Bassin and the Registrant10.21.2
              
              Amendment
                  dated May 7, 2007 to Employment Agreement dated January 1, 2003
                  by and
                  between David Bassin and the Registrant31.1
              
              Certification
                  by the Chief Executive Officer Pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 200231.2
              
              Certification
                  by the Chief Financial Officer Pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 200232.1
              
              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 200232.2
              
              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
















22


**SIGNATURES**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned thereunto
      duly authorized.





**INVENTIV
      HEALTH, INC.**











**COMPANY
              NAME CORPORATION**Date: May
              9,
              2007
            By:
            /s/ John
              R.
              EmeryJohn
              R. EmeryTitle  Chief
              Financial Officer               (


23