**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 June 30, 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
      July 31, 2007, there were 32,251,032 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 June 30, 2007and
                December 31, 2006 (unaudited)
            1Condensed
                Consolidated Income Statements for the three and
                six-monthsended
                June 30, 2007 and 2006 (unaudited)
            2Condensed
                Consolidated Statements of Cash Flows for the
                six-monthsended
                June 30, 2007 and 2006 (unaudited)
            3Notes
                to Condensed Consolidated Financial
                Statements
            4-18ITEM
                2. Management's Discussion and Analysis of Financial
                Condition andResults
                of Operations
            19-30ITEM
                3. Quantitative and Qualitative Disclosures About Market
                Risk
            31ITEM
                4. Controls and Procedures
            31-32**PART
                II. OTHER INFORMATION**ITEM
                1. Legal Proceedings****
            32ITEM
                1A. Risk Factors
            32-33ITEM
                3. Unregistered Sales of Equity Securities and use of
                Proceeds
            33ITEM
                4. Submission of Matters to a Vote of Security
                Holders
            33ITEM
                5. Other Information
            34ITEM
                6. Exhibits
            35**SIGNATURES**











**PART
      I. FINANCIAL INFORMATION**


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


**INVENTIV
      HEALTH, INC.**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


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


June
                30,
            December
                31,2007
            2006**ASSETS**Current
                assets:Cash
                and equivalents
            $41,468
            $79,835Restricted
                cash
            175
            50Accounts
                receivable, net of allowances for doubtful accounts of $11,814 and
                $3,583
                atJune
                30, 2007 and December 31, 2006, respectively
            110,807
            124,283Unbilled
                services
            91,070
            75,691Prepaid
                expenses and other current assets
            14,970
            8,524Income
                tax receivable
            9,347
            --Current
                deferred tax assets
            434
            834Total
                current assets
            268,271
            289,217Property
                and equipment, net
            48,838
            43,380Equity
                investments
            5,470
            5,076Goodwill
            298,368
            266,827Other
                intangibles, net
            184,662
            152,637Deposits
                and other assets
            15,867
            13,917Total
                assets
            $821,476
            $771,054**LIABILITIES
                AND STOCKHOLDERS’ EQUITY**Current
                liabilities:Current
                portion of capital lease obligations
            $12,880
            $11,708Borrowings
                under line of credit
            20,000
            --Current
                portion of long-term debt
            1,667
            1,667Accrued
                payroll, accounts payable and accrued expenses
            90,053
            123,175Current
                income tax liabilities
            --
            1,475Client
                advances and unearned revenue
            56,713
            64,508Total
                current liabilities
            181,313
            202,533Capital
                lease obligations, net of current portion
            21,818
            21,800Long-term
                debt
            162,083
            162,917Non-current
                income tax liabilities
            6,297
            --Deferred
                tax liabilities
            12,207
            6,756Other
                non-current liabilities
            9,089
            18,471Total
                liabilities
            392,807
            412,477Commitments
                and contingenciesMinority
                interests
            (74)
            115Stockholders’
                Equity:Preferred
                stock, $.001 par value, 10,000,000 shares authorized, none issued
                and
                outstanding atJune
                30, 2007 and December 31, 2006, respectively
            --
            --Common
                stock, $.001 par value, 50,000,000 shares authorized; 31,671,772
                and
                29,975,710Shares
                issued and outstanding at June 30, 2007 and December 31, 2006,
                respectively
            32
            30Additional
                paid-in-capital
            336,295
            284,331Accumulated
                other comprehensive income (losses)
            362
            (226)Accumulated
                earnings
            92,054
            74,327Total
                stockholders’ equity
            428,743
            358,462Total
                liabilities and stockholders’ equity
            $821,476
            $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**
            
            **For
                the Six-Months Ended****June
                30,******
            
            **June
                30,****2007**
            **2006**
            
            **2007**
            **2006**Net
                revenues
            $193,455
            $154,739
            
            $369,846
            $297,677Reimbursed
                out-of-pockets
            38,979
            28,240
            
            84,544
            58,979Total
                revenues
            232,434
            182,979
            
            454,390
            356,656Operating
                expenses:Cost
                of services
            122,728
            97,947
            
            239,901
            193,061Reimbursable
                out-of-pocket expenses
            40,146
            29,913
            
            85,801
            59,606Selling,
                general and administrative expenses
            54,445
            34,938
            
            95,030
            64,925Total
                operating expenses
            217,319
            162,798
            
            420,732
            317,592Operating
                income
            15,115
            20,181
            
            33,658
            39,064Interest
                expense
            (3,884)
            (2,241)
            
            (7,446)
            (3,898)Interest
                income
            502
            362
            
            1,342
            1,096Income
                from continuing operations before income tax provision, minority
                interest
                in income of subsidiary and income (loss) from equity
                investments
            11,733
            18,302
            
            27,554
            36,262Income
                tax (provision) benefit
            (4,445)
            1,748
            
            (9,859)
            (5,436)Income
                from continuing operations before minority interest in income of
                subsidiary and income (loss) from equity investments
            7,288
            20,050
            
            17,695
            30,826Minority
                interest in income of subsidiary
            (234)
            (352)
            
            (489)
            (676)Income
                (loss) from equity investments
            111
            166
            
            346
            (144)Income
                from continuing operations
            7,165
            19,864
            
            17,552
            30,006Income
                from discontinued operations:Gains
                on disposals of discontinued operations, net of taxes
            92
            1,115
            
            175
            1,221Net
                income from discontinued operations
            92
            1,115
            
            175
            1,221Net
                income
            $7,257
            $20,979
            
            $17,727
            $31,227Earnings
                per share (see
                Note 7):Continuing
                operations:Basic
            $0.23
            $0.68
            
            $0.57
            $1.05Diluted
            $0.22
            $0.66
            
            $0.55
            $1.01Discontinued
                operations:Basic
            $0.00
            $0.04
            
            $0.00
            $0.04Diluted
            $0.01
            $0.03
            
            $0.01
            $0.04Net
                income:Basic
            $0.23
            $0.72
            
            $0.57
            $1.09Diluted
            $0.23
            $0.69
            
            $0.56
            $1.05Weighted
                average common shares outstanding:Basic
            31,336
            29,188
            
            30,874
            28,696Diluted
            32,026
            30,186
            
            31,631
            29,737





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 Six-Months Ended****June
                30,****2007**
            **2006**Cash
                flows from operating activities:Net
                income
            $17,727
            $31,227Income
                from discontinued operations
            (175)
            (1,221)Income
                from continuing operations
            17,552
            30,006Adjustments
                to reconcile net income to net cash provided by operating
                activities:Depreciation
            8,508
            7,578Amortization
            3,901
            2,616(Loss)
                Income from equity investments
            (346)
            144Minority
                interest in income of subsidiary
            489
            676Fair
                market value adjustment on derivative financial instrument
            (589)
            (2,824)Deferred
                taxes
            5,851
            (7,198)Stock
                compensation expense
            4,961
            3,336Tax
                benefit from stock option exercises and vesting of restricted
                shares
            7,892
            4,530Changes
                in assets and liabilities, net of effects from discontinued
                operations:Accounts
                receivable, net
            21,540
            22,971Unbilled
                services
            (14,623)
            (18,428)Prepaid
                expenses and other current assets
            (6,341)
            (2,889)Accrued
                payroll, accounts payable and accrued expenses
            (1,398)
            (8,912)Net
                tax liabilities
            (5,870)
            5,128Client
                advances and unearned revenue
            (9,374)
            2,411Excess
                tax benefits from stock based compensation
            (6,420)
            (4,002)Other
            (7,705)
            3,569Net
                cash provided by continuing operations
            18,028
            38,712Net
                cash (used in) provided by discontinued operations
            (166)
            1,103Net
                cash provided by operating activities
            17,862
            39,815Cash
                flows from investing activities:Restricted
                cash balances
            (125)
            3,561Investment
                in cash value of life insurance policies
            (2,556)
            (3,439)Cash
                paid for acquisitions, net of cash acquired
            (49,524)
            (50,412)Acquisition
                earn-out payments
            (23,055)
            (8,267)Equity
                investments
            (48)
            304Purchases
                of property and equipment
            (4,189)
            (3,755)Proceeds
                from manufacturers rebates on leased vehicles
            260
            141Net
                cash used in continuing operations
            (79,237)
            (61,867)Net
                cash provided by discontinued operations
            341
            118Net
                cash used in investing activities
            (78,896)
            (61,749)Cash
                flows from financing activities:Repayments
                on credit agreement
            (834)
            (875)Borrowings
                under line of credit
            20,000
            --Repayments
                on capital lease obligations
            (7,456)
            (6,759)Withholding
                shares for taxes
            (661)
            (85)Proceeds
                from exercise of stock options
            5,816
            2,778Excess
                tax benefits from stock-based compensation
            6,420
            4,002Distributions
                to minority interests in affiliated partnership
            (678)
            (552)Net
                cash provided by (used in) continuing operations
            22,607
            (1,491)Net
                cash provided by (used in) discontinued operations
            --
            --Net
                cash provided (used in) by financing activities
            22,607
            (1,491)Effect
                of exchange rate changes
            60
            714Net
                change in cash and equivalents
            (38,367)
            (22,711)Cash
                and equivalents, beginning of period
            79,835
            73,102Cash
                and equivalents, end of period
            $41,468
            $50,391Supplemental
                disclosures of cash flow information:Cash
                paid for interest
            $6,575
            $6,392Cash
                paid for income taxes
            $11,177
            $2,977Supplemental
                disclosures of non-cash activities:Vehicles
                acquired through capital lease agreements
            $11,546
            $11,003Stock
                issuance related to acquisitions
            $34,661
            $27,177





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, life sciences and healthcare 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 250 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
      19:





·
            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.), Adheris, Inc. ("Adheris"),
                Jeffrey Simbrow Associates ("JSAI"), ignite comm.net and Incendia
                Health,
                Inc. (collectively, “Ignite”), Chamberlain Communications Group, Inc.
                (“Chamberlain”), and Addison Whitney, Inc. (“Addison Whitney”).





·
            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 June 30, 2007 and December 31,
      2006,
      the condensed consolidated income statements of the Company for the three and
      six-months ended June 30, 2007 and 2006 and the condensed consolidated cash
      flows for the six-months ended June 30, 2007 and 2006. Operating results for
      the
      three and six-months ended June 30, 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**




These
      condensed consolidated financial statements should be read in conjunction with
      the audited consolidated financial statements and accompanying notes included
      in
      the Company's Annual Report on Form 10-K for the year ended December 31, 2006
      as
      filed with the Securities and Exchange Commission on February 28, 2007.





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., one of India's largest domestic contract research
      organizations, 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.





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 Financial Accounting Standards Board (“FASB”) issued
      Statement of Financial Accounting Standards (“SFAS 159”) 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 SFAS 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**


**4.**  **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
      at the end of an earn-out period in conjunction with the preparation of the
      Company’s quarterly financial statements when the acquired company’s results are
      reviewed, as more fully described below. The terms of the acquisition agreements
      generally include multiple earn-out periods or a multi-year earnout period.
      Except for inVentiv Communications, Inc., p ro
      forma
      financial information was not required to be disclosed under the Securities
      and
      Exchange Commission’s Regulation S-X for the following acquisitions because none
      of the specific thresholds were met as they were not material to the
      consolidated operations of the Company at the time of acquisition.





**Chandler
      Chicco Agency (“CCA”)** - In
      July 2007, the Company completed the acquisition of CCA, for approximately
      $65.0
      million in cash and stock, excluding 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 CCA’s
      performance measurements during 2007 through 2010. CCA is based in New York
      and
      is one of the largest healthcare-focused
      public relations firms in the world .
      CCA
      includes agencies organized and operating in the United States, the United
      Kingdom and France. Since the acquisition closed after June 30, 2007, CCA’s
      financial results were not included in the condensed consolidated financial
      statements for the quarter ended June 30, 2007.





**Innovative
      Health Strategies, Inc., iProcert, LLC and the related AWAC.MD business
      (collectively "AWAC")** - In
      July 2007, the Company completed the acquisition of AWAC for
      approximately $75.0 million in cash and stock, excluding 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 AWAC’s performance measurements during 2007 through
      2010. AWAC is based in Georgia and is a
      leading
      provider of proprietary IT-driven cost containment and medical consulting
      solutions to third party administrators ("TPAs"), ERISA self-funded plans,
      fully
      insured plans, employer groups, managing general underwriters ("MGUs") and
      insurance carriers .
      The
      AWAC acquisition included the business assets of AWAC.MD, Inc. as well as
      Innovative Health Strategies, Inc. and iProcert, LLC, which were acquired as
      entities. Since the acquisition closed after June 30, 2007, AWAC’s financial
      results were not included in the condensed consolidated financial statements
      for
      the quarter ended June 30, 2007.





**Addison
      Whitney** - In
      June 2007, the Company completed the acquisition of Addison Whitney for
      approximately $18.3 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 Addison Whitney’s performance measurements during 2007
      through 2010. Addison Whitney is based in North Carolina, and specializes in global
      branding consultancy that focuses on creating unique corporate and product
      brands .
      Addison
      Whitney’s financial results were included in the condensed consolidated
      financial statements within the inVentiv Communications’ segment from the
      acquisition date to June 30, 2007.





**Strategyx** - In
      June 2007, the Company completed the acquisition of Strategyx for approximately
      $9.9 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 Strategyx’s performance measurements during 2007 through 2010. Strategyx is
      based in Somerville, New Jersey, and specializes in global
      strategic consulting .
      Strategyx’s financial results were included in the condensed consolidated
      financial statements within the inVentiv Commercial segment from the acquisition
      date to June 30, 2007.





**Ignite** - In
      March 2007, the Company completed the acquisition of Ignite and Incendia Health
      Studios (which now operates as a division 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
      inVentiv Communications’ segment from the acquisition date to June 30, 2007.




6


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




**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.





**JSAI** - In
      April 2006, the Company acquired JSAI for approximately $8.8 million in cash
      and
      stock, including certain post-closing adjustments and direct acquisition costs.
      JSAI is Canada's leading healthcare marketing and communications agency. The
      Company will be obligated to make certain earn-out payments, which may be
      material, contingent on JSAI’s performance measurements during the 12-month
      periods ending March 31, 2007, 2008 and 2009. The amount due with respect to
      JSAI for the 12-month period ended March 31, 2007 was approximately $2.8 million
      in cash and stock, which the Company accrued at March 31, 2007, and the cash
      portion of approximately $1.1 million was paid in 2007. 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 10. 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.
      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 portions adjusted in the subsequent years mainly relate to
      the
      finalization of the earn-outs for the previous years, as allowed under the
      contract. The results of inVentiv Communications, Inc. have been reflected
      in
      the inVentiv Communications segment since the date of acquisition.





7


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




**5.**  **Allowance
      for Doubtful Accounts:**





During
      the three-months ended June 30, 2007, the Company increased its allowance for
      doubtful accounts by $8.3 million. The majority of this increase relates to
      a
      client that declared Chapter 11 bankruptcy subsequent to the end of the second
      quarter of 2007.





**6.**  **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 $0.7 million was recorded in cost of services and $1.8 million
      recorded as Selling, General and Administrative expenses (“SG&A”) for the
      three months ended June 30, 2007 and $1.7 million, of which $0.6 million was
      recorded in cost of services and $1.1 million recorded as SG&A for the three
      months ended June 30, 2006. During the six-months ended June 30, 2007, the
      stock-based compensation expense of $5.0 million, of which $1.3 million was
      recorded in cost of services and $3.7 million recorded as Selling, General
      and
      SG&A and for the six months ended June 30, 2006, $3.3 million, of which $1.2
      million was recorded in cost of services and $2.1 million recorded as SG&A.





8


**INVENTIV
        HEALTH, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        Continued**
  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 $1.7 million for the three months ended June 30, 2007 and
      2006, respectively, net income to decrease by $1.5 million and $1.0 million
      for
      the three months ended June 30, 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 June 30, 2007 and 2006, respectively. During the
      six
      months ended June 30, 2007 and June 30, 2006 the stock-based compensation
      expense caused income before income tax provision, minority interest in income
      of subsidiary and income (loss) from equity investments to decrease by $5.0
      million and $3.3 million, respectively, net income to decrease by $2.9 million
      and $2.0 million for the six months ended June 30, 2007 and 2006, respectively,
      and basic and diluted earnings per share to decrease by $0.09 per share and
      $0.07 per share for the six months ended June 30, 2007 and 2006, respectively.


Cash
      provided by financing activities increased by $6.4 million and $4.0 million
      for
      the six-months ended June 30, 2007 and 2006, respectively, related to excess
      tax
      benefits from the exercise of stock-based awards.





Assumptions





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





**Three
                Months Ended**
              **June
                30,**
            **Six
                Months Ended**
              **June
                30,****2007**
            **2006**
            **2007**
            **2006**Expected
                life of option
            5.5-6
                yrs
            5.5-6
                yrs
            5.5-6
                yrs
            5.5-6
                yrsRisk-free
                interest rate
            --(1)
            5.03%
            4.77%
            4.90%Expected
                volatility
            40%
            45%
            40%
            45%Expected
                dividend yield
            0.00%
            0.00%
            0.00%
            0.00%


(1)  In
      the
      second quarter of 2007, no options were granted by the Company, hence, the
      interest rate was not applicable.








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 half of 2007 from 39% during the fourth quarter of 2006. For the
      six months ended June 30, 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 the six months ended 2007 and 2006 were 3.34% and 2.85%,
      respectively.








Stock
      Incentive Plan and Award Activity





The
      Company’s 2006 Stock Incentive Plan (“Stock Plan”) authorizes 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.





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 six months ended June 30, 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
            114
            $35.01Exercised
            (638)
            $9.12Forfeited/expired/cancelled
            (52)
            $23.46Outstanding
                at June 30, 2007
            1,618
            $17.67
            7.16
            $30,637Vested
                and expected to vest at June 30, 2007
            1,547
            $17.42
            7.11
            $29,689Options
                exercisable at June 30, 2007
            774
            $12.78
            6.22
            $18,439




The
      weighted-average grant-date fair value of stock options granted during the
      three-months ended June 30, 2007 was not applicable as no stock options were
      granted and during the three-months ended June 30, 2006 was $12.94 per share
      and
      during the six-months ended June 30, 2007 and 2006 were $16.25 and $12.48 per
      share, respectively. The total intrinsic value of options exercised during
      the
      three-months ended June 30, 2007 and 2006 was $4.2 million and $0.4 million,
      respectively, and in addition, $5.8 million and $2.8 million during the
      six-months ended June 30, 2007 and 2006, respectively. As of June 30, 2007
      and
      December 31, 2006, there was approximately $8.3 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 2.2 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 $4.5 million and $0.5 million for
      the
      three months ended June 30, 2007 and 2006, respectively, and during the
      six-months ended June 30, 2007 and 2006 were $6.5 million and $4.0 million,
      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
            $4.00
            175,163
            $2.96
            5.39
            175,163
            $2.96$4.11
            To
            $8.45
            202,136
            $8.19
            4.28
            158,449
            $8.13$9.15
            To
            $15.48
            53,229
            $13.06
            6.73
            24,929
            $12.67$15.96
            To
            $15.96
            300,000
            $15.96
            7.23
            200,000
            $15.96$16.89
            To
            $17.25
            217,689
            $17.08
            7.31
            37,661
            $17.05$17.57
            To
            $23.70
            166,811
            $18.50
            7.20
            87,313
            $17.92$23.91
            To
            $26.76
            199,500
            $25.57
            8.39
            44,813
            $25.63$26.77
            To
            $26.77
            180,000
            $26.77
            8.96
            45,000
            $26.77$30.64
            To
            $30.64
            24,588
            $30.64
            9.15
            524
            $30.64$35.01
            To
            $35.01
            98,851
            $35.01
            9.56
            --
            $--1,617,967
            
            
            773,852




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 six months ended June 30, 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
            254
            $35.27Released
            (113)
            $22.11Forfeited
            (37)
            $24.03Nonvested
                at June 30, 2007
            624
            $29.32




As
      of
      June 30, 2007 and December 31, 2006, there was approximately $14.9 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 3.3 years
      for
      both periods. The total fair value of shares vested during the three and six
      months ended June 30, 2007 were $1.5 million and $4.1 million, respectively.
      During the three and six-months ended June 30, 2006 the amounts were $1.0
      million and $1.3 million, respectively.




**7.**  **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 June 30,**
            **Six-Months
                Ended June 30,****2007**
            **2006**
            **2007**
            **2006****(in
                thousands, except per share data)****Basic
                EPS from Continuing Operations Computation**Income
                from continuing operations
            $7,165
            $19,864
            $17,552
            $30,006Weighted
                average number of common shares outstanding
            31,336
            29,188
            30,874
            28,696Basic
                EPS from continuing operations
            $0.23
            $0.68
            $0.57
            $1.05**Diluted
                EPS from Continuing Operations Computation**Income
                from continuing operations
            $7,165
            $19,864
            $17,552
            $30,006Weighted
                average number of common shares outstanding
            31,336
            29,188
            30,874
            28,696Stock
                options(1)
            523
            897
            583
            948Restricted
                stock awards(2)
            167
            101
            174
            93Total
                diluted common shares outstanding
            32,026
            30,186
            31,631
            29,737Diluted
                EPS from continuing operations
            $0.22
            $0.66
            $0.55
            $1.01




(1) For the
      three-months and six-months ended June 30, 2007, 139,229 and 130,225 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.
      Similarly, for the three and six months ended June 30, 2006, 308,210 shares
      and
      283,869 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 and six-months ended June 30, 2007, negligible amount of shares
      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. Similarly,
      for
      the three and six months ended June 30, 2006, 27,203 shares and 15,006 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.





11


**INVENTIV
        HEALTH, INC.**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        Continued**
  8.  **Significant
      Clients:**





During
      the
      six-months ended June 30, 2007 and 2006 the Company had no clients that
      accounted for more than 10%, individually, of the Company's total revenues
      across our inVentiv Clinical, inVentiv Communications and inVentiv Commercial
      segments.







**9**.  **Goodwill
      and Other Intangible Assets:**





Goodwill
      consists of the following:





(in
                thousands)
            **January
                1,**
              **2007**
            **Acquisitions**
            **Contingent****(1)**
              **Consideration**
            **June
                30,**
              **2007**inVentiv
                Clinical
            $55,742
            $12
            $(133)
            $55,621inVentiv
                Communications
            157,863
            24,551
            2,216
            184,630inVentiv
                Commercial
            53,222
            4,087
            808
            58,117Total
            $266,827
            $28,650
            $2,891
            $298,368


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




Other
      intangible assets consist of the following:





**June
                30, 2007**
            
            **December
                31, 2006**(in
                thousands)
            
            **Accumulated**
            
            
            
            **Accumulated****Gross**
            **Amortization**
            **Net**
            
            **Gross**
            **Amortization**
            **Net**Customer
                relationships
            $82,607
            $(10,707)
            $71,900
            
            $59,987
            $(7,240)
            $52,747Noncompete
                agreement
            880
            (495)
            385
            
            880
            (372)
            508Tradenames
                subject to amortization
            911
            (142)
            769
            
            911
            (66)
            845Other
            3,506
            (558)
            2,948
            
            2,600
            (323)
            2,277Total
                definite-life intangibles
            87,904
            (11,902)
            76,002
            
            64,378
            (8,001)
            56,377Tradenames
                not subject to amortization(1)
            108,660
            --
            108,660
            
            96,260
            --
            96,260Total
                other intangibles(2)
            $196,564
            $(11,902)
            $184,662
            
            $160,638
            $(8,001)
            $152,637


(1)
              These
                  indefinite-life tradenames arose primarily from acquisitions 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
                  $35.9 million increase in total gross other intangibles arise from
                  the
                  2007 acquisitions.


The
      acquisitions discussed in Note 4 resulted in approximately $277.8 million of
      goodwill and the following gross intangible assets:





**Intangible
                asset**
            
            **Amount**
              **(in
                thousands)**
            **Weighted
                average amortization period**Tradename
            
            $109,571
            (1)Customer
                relationships
            
            82,607
            10.6
                yearsNoncompete
                agreement
            
            880
            4.1
                yearsOther
            
            3,246
            6.2
                yearsTotal
            
            $196,304
            (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 June 30, 2007,
      is
      expected to be $4.7 million for the remainder of 2007, $9.3 million in 2008,
      $8.9 million in 2009, $8.5 million in 2010, $8.1 million in 2011, $7.7 million
      in 2012 and $28.7 million thereafter.





Goodwill
      and other indefinite-life intangibles, such as tradenames, are assessed annually
      for potential impairment on June 30, pursuant to the guidelines of SFAS 142, *Goodwill
      and Other Intangible Assets* .
      The
      Company conducted its assessment and concluded that the foregoing balances
      on
      the Company’s Condensed Consolidated Balance Sheet were not impaired as of June
      30, 2007.





12


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




On
      July
      6, 2007, the Company entered into an Amended and Restated Credit Agreement
      (“the
      Credit Agreement”) with UBS AG, Stamford Branch and others. The Credit Agreement
      provides for a secured term loan of $330 million which was made available to
      inVentiv in a single drawing, up to $20 million in additional term loans
      ("delayed draw term loans") that may be advanced no later than January 6, 2008,
      a $50 million revolving credit facility, of which $10 million is available
      for
      the issuance of letters of credit, and a swingline facilty. The Credit Agreement
      amended and restated the previous $175 million term loan facility, which the
      Company entered into with UBS AG, Stamford Branch, and others in connection
      with
      the inVentiv Communications, Inc. acquisition in October 2005.






The
      term
      loan will mature on the seventh anniversary of the Credit Agreement, with
      scheduled quarterly amortization of 1% per year during years one through six
      and
      94% during year seven. The delayed draw term loans will mature on the seventh
      anniversary of the Credit Agreement, with scheduled quarterly amortization
      of
      0.25% per quarter and the balance becoming due on such seventh anniversary.
      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, certain issuances of debt obligations and
      50%
      of certain issuances of equity securities of inVentiv and its subsidiaries,
      subject to certain exceptions. inVentiv 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 in respect of term loans (including delayed draw term
      loans) that are repaid or prepaid may not be reborrowed. Amounts borrowed under
      the Credit Agreement in respect of revolving loans may be paid or prepaid and
      reborrowed.






Interest
      on the loans will accrue, at inVentiv's 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 inVentiv's option of 1, 2, 3 or 6 months (or, if the affected
      lenders agree, 9 months), in each case plus a spread based equal to 0.75% for
      Alternate Base Rate loans and 1.75% for Adjusted LIBOR Rate loans.






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 and transactions with affiliates. The Credit Agreement also
      includes a financial covenant under which inVentiv is required to maintain
      a
      total leverage ratio that does not exceed, as of the last day of any four
      consecutive fiscal quarters, 4.0 to 1.0 through December 31, 2009 and 3.5 to
      1.0
      thereafter.






Under
      certain conditions, the lending commitments under the Credit Agreement may
      be
      terminated by the lenders and amounts outstanding under the Credit Agreement
      may
      be accelerated. Such events of default include failure to pay any principal,
      interest or other amounts when due, failure to comply with covenants, breach
      of
      representations or warranties in any material respect, non-payment or
      acceleration of other material debt of inVentiv and its subsidiaries,
      bankruptcy, insolvency, material judgments rendered against inVentiv or certain
      of its subsidiaries or a 40% change of control of inVentiv, subject to various
      exceptions and notice, cure and grace periods.






The
      three-month LIBOR base rate as of June 30, 2007 and December 31, 2006 was 5.36%.
      As disclosed in Note 12, the Company continues to maintain a derivative
      financial instrument of $165 million to hedge against the new $330 million
      term
      loan facility.




During
      2005, the Company incurred costs of approximately $3.3 million related to the
      prior credit facility. These deferred financing costs are amortized as interest
      expense over the life of the loan using the effective interest rate method.
      At
      June 30, 2007 and December 31, 2006, respectively, approximately $2.5 million
      and $2.7 million are included on the June 30, 2007 and December 31, 2006
      condensed consolidated balance sheets, respectively. At June 30, 2007 and
      December 31, 2006, the Company had approximately $163.8 million and $164.6
      million outstanding on the secured term loan outstanding under the credit
      facility. As mentioned above, the principal on the new credit facility entered
      into in July 2007 is $330 million, excluding additional deferred financing
      costs
      of approximately $2.1 million, which will be amortized over the remaining life
      of the loan.





13


INVENTIV
        HEALTH, INC.
 NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
        Continued
  11.





During
      2000, the Company entered into a master lease agreement to provide a fleet
      of
      automobiles for sales representatives of its inVentiv Commercial Services
      operating segment. During the fourth quarter of 2002, the segment entered into
      a
      second agreement with another vendor. Based on the terms of the agreement,
      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 $11.6 million (including rebates of $0.3 million) and
      $11.0 million (including rebates of $0.1 million) during the six-months ended
      June 30, 2007 and 2006, respectively. The Company also incurred net disposals
      of
      $3.5 million and $4.9 million during the six-months ended June 30, 2007 and
      2006, respectively.





**12.**  **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 inVentiv Communications, Inc. The Company
      entered into this interest rate swap agreement to modify the interest rate
      characteristics of its outstanding long-term debt. At 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 half
      of
      2007, the fair market value of the derivative asset increased by $0.1 million
      to
      approximately $1.3 million. Approximately $0.6 million of the $0.1 million
      net
      adjustment was recorded as interest expense due to ineffectiveness, while the
      remaining $0.7 million ($0.4 million, net of taxes) was recorded as an increase
      to Other Comprehensive Income.





**13.**  **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 June 30, 2007 are likely to have
      a
      material adverse effect on inVentiv.





14


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





**14.**  **Deferred
      Compensation:**





The
      Ventiv Health, Inc. Deferred Compensation Plan (the "NQDC 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 NQDC Plan. The compensation deferrals were
      initiated in 2005. The deferred compensation liability of approximately $6.0
      million and $4.2 million was included in other non-current liabilities in the
      Company’s Condensed Consolidated Balance Sheets as of June 30, 2007 and December
      31, 2006. The NQDC Plan does not provide for the payment of above-market
      interest to participants.





To
      assist
      in the funding of the NQDC 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 June 30, 2007 and December 31,
      2006 was approximately $5.5 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 $0.4 million and $1.1
      million as of June 30, 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.





**15.**   **Income
      Taxes**





The
      effective tax rate for the six-month period ended June 30, 2007 was 36.0%.
      The
      rate included a tax benefit relating to state taxes settled of approximately
      $0.6 million, $0.1 million of a tax detriment relating to interest on
      unrecognized tax benefits and $1.0 million of a tax benefit relating to federal
      tax benefits of state tax reserves. The effective tax rate for the six-month
      period ended June of 2006 was 15.0%. The rate included approximately $9.1
      million tax benefit relating to net operating losses of a previously-divested
      unit. 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.





As
      of
      June 30, 2007 the income tax receivable of $9.3 million resulted primarily
      from
      timing differences in payments and stock compensation deductions. The deferred
      tax liabilities increased $5.4 million during the six-months ended June 30,
      2007
      primarily from the acquisition of Chamberlain. During the six-months ended
      June
      30, 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 or cash flows. The amount of unrecognized tax benefits
      was
      $2.5 million as of January 1, 2007 and $2.1 million as of June 30, 2007.
      Included in these balances were positions that, if recognized, would affect
      the
      Company’s effective tax rate by $1.6 million as of January 1, 2007 and $1.3
      million as of June 30, 2007.





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. As of June 30, 2007,
      there was no net change in potential interest and penalties associated with
      uncertain tax positions. No net change resulted as $0.2 million of additional
      interest and penalties was offset by $0.2 million interest and penalties
      settled.





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 $1.0 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.


15


**INVENTIV
      HEALTH, INC.**


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





**16.**   **Stockholders’
      Equity**




The
      following table describes the 2007 activity in the Company’s Stockholders’
Equity accounts for the six-months ended June 30, 2007:




**Common
                Stock**
            **Additional
                Paid-In**
              **Capital**
            **Accumulated
                earnings**
            **Compre-hensive**
              **Income**
            **Accumulated
                Other Comprehen-sive (Losses) Income (1)**
            **Total**Balance
                at December 31, 2006
            $30
            $284,331
            $74,327
            
            ($226)
            $358,462Net
                income
            
            
            17,727
            $17,727
            
            17,727Net
                change in effective portion of
              derivative,
                net of taxes
            
            
            
            401
            401
            401Foreign
                currency translation
              adjustment
            
            
            
            187
            187
            187$18,315Restricted
                stock expense
            
            2,435
            
            
            
            2,435Withholding
                shares for taxes
            
            (661)
            
            
            
            (661)Tax
                benefit from exercise of
              employee
                stock options and vesting
              of
                restricted stock
            
            6,546
            
            
            
            6,546Consultant
                compensation
            
            642
            
            
            
            642Proceeds
                from exercise of stock
              options
            1
            5,816
            
            
            
            5,817Stock
                option expense
            
            2,526
            
            
            
            2,526Issuance
                of shares in connection with
              acquisitions
            1
            34,660
            
            
            
            34,661Balance
                at June 30, 2007
            $32
            $336,295
            $92,054
            
            $362
            $428,743





(1)
      As of
      June 30, 2007 Accumulated Other Comprehensive Income consists of $0.7 million
      of
      currency translation fluctuations in our 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 as
      well
      as approximately ($0.3 million, net of taxes) that relates to the effective
      portion of the Company’s derivative instrument, as described in Note 12.





**17.**  **Discontinued
      Operations:**





For
      the
      six months ended June 30, 2007 and 2006, earnings from discontinued operations,
      net of taxes, were approximately $0.2 million and $1.2 million, respectively.
      The gains on disposals of discontinued operations consisted of contingency
      payments due from the Company’s previously-divested Germany-based
      unit.





16


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


**18.**  **Related
      Parties:**





inVentiv
      Communications’ leases its current headquarters facility in Westerville, Ohio
      from Lexington MLP Westerville L.P. Prior to May 15, 2007, this facility was
      partially owned by R. Blane Walter, the Company’s President (who is also a
      member of the Board of Directors), his brothers and other current employees
      of
      inVentiv Communications. The term of the lease is fifteen years, and expires
      on
      September 30, 2015.





**19.**  **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 as of June 30, 2007:





·
            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.





As
      mentioned in footnote 4, subsequent to the second quarter of 2007 and prior
      to
      the release of the related condensed consolidated financial statements, the
      Company acquired CCA and AWAC. CCA is expected to be reported in the
      Communications’ segment, while the Company has not determined the segment AWAC
      will report into, but is considering adding a fourth segment called inVentiv
      Patient Outcomes.  AWAC’s
      impact on the 2007 consolidated financial statements is not expected to be
      material.





Segment
      information for the three-months ended June 30, 2007 is as follows (in
      thousands):





**inVentiv**
              **Clinical**
            **inVentiv
                Communications**
            **inVentiv
                Commercial**
            **Other**
            **Total**Revenues
            $46,966
            $85,899
            $102,316
            $--
            $235,181Less:
                Intersegment revenues
            --
            (195)
            (2,552)
            --
            (2,747)Reported
                Revenues
            $46,966
            $85,704
            $99,764
            $--
            $232,434Depreciation
                and amortization
            457
            1,906
            4,338
            11
            6,712Interest
                expense
            --
            --
            554
            3,330
            3,884Interest
                income
            15
            143
            1
            343
            502Segment
                income (loss) (1)
            $2,789
            $12,915
            $2,934
            $(6,905)
            $11,733








Segment
      information for the three-months ended June 30, 2006 is as follows (in
      thousands):





**InVentiv**
              **Clinical**
            **inVentiv
                Communications**
            **inVentiv
                Commercial**
            **Other**
            **Total**Revenues
            $38,541
            $64,898
            $80,955
            $--
            $184,394Less:
                Intersegment revenues
            (122)
            (363)
            (930)
            --
            (1,415)Reported
                Revenues
            $38,419
            $64,535
            $80,025
            $--
            $182,979Depreciation
                and amortization
            415
            1,466
            3,469
            22
            5,372Interest
                expense
            --
            8
            415
            1,818
            2,241Interest
                income
            10
            155
            --
            197
            362Segment
                income (loss) (1)
            $3,597
            $8,797
            $10,245
            $(4,337)
            $18,302





Segment
      information for the six-months ended June 30, 2007 is as follows (in
      thousands):





**InVentiv**
              **Clinical**
            **inVentiv
                Communications**
            **inVentiv
                Commercial**
            **Other**
            **Total**Revenues
            $88,410
            $166,288
            $204,821
            $--
            $459,519ess:
                Intersegment revenues
            (3)
            (419)
            (4,707)
            --
            (5,129)Reported
                Revenues
            $88,407
            $165,869
            $200,114
            $--
            $454,390Depreciation
                and amortization
            897
            3,422
            8,058
            32
            12,409Interest
                expense
            --
            --
            1,054
            6,392
            7,446Interest
                income
            36
            385
            1
            920
            1,342Segment
                income (loss) (1)
            $4,641
            $24,812
            $11,450
            $(13,349)
            $27,554





17


**INVENTIV
      HEALTH, INC.**


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





Segment
      information for the six-months ended June 30, 2006 (in
      thousands):





**inVentiv**
              **Clinical**
            **inVentiv
                Communications**
            **inVentiv
                Commercial**
            **Other**
            **Total**Revenues
            $71,011
            $117,476
            $170,759
            $--
            $359,246Less:
                Intersegment revenues
            (156)
            (489)
            (1,945)
            --
            (2,590)Reported
                Revenues
            $70,855
            $116,987
            $168,814
            $--
            $356,656Depreciation
                and amortization
            729
            2,321
            7,101
            43
            10,194Interest
                expense
            --
            19
            814
            3,065
            3,898Interest
                income
            22
            282
            --
            792
            1,096Segment
                income (loss) (1)
            $4,923
            $17,506
            $21,359
            $(7,526)
            $36,262








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




(in
                thousands)
            
            **June
                30**
            **Dec 31****2007**
            **2006**Total
                Assets:inVentiv
                Clinical
            
            $
            114,683
            $
            105,253inVentiv
                Communications
            
            
            462,876
            
            408,859inVentiv
                Commercial
            
            
            195,107
            
            192,975Other
            
            
            48,810
            
            63,967Total
                assets
            
            $
            821,476
            $
            771,054







18


**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, life sciences and healthcare industries. We support 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. In
      addition, we provide medical cost containment services to payors. Our 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. We
      provide services to over 250 client organizations, including all top 20 global
      pharmaceutical companies and numerous emerging and specialty biotechnology
      companies.





Our
      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. We have 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. For payors, we provide
      pre-adjudication services to identify savings opportunities resulting from
      billing errors, additional discounts and treatment protocols for
      patients.





*Business
      Segments*





We
      currently serve our clients primarily through three business segments, which
      correspond to our reporting segments for 2007:





·
            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.), Adheris, Inc. ("Adheris"),
                Jeffrey Simbrow Associates ("JSAI"), ignite comm.net and Incendia
                Health,
                Inc. (collectively, “Ignite”) (acquired in March 2007), Chamberlain
                Communications Group, Inc. (“Chamberlain”) (also acquired in March 2007),
                and Addison Whitney, Inc. (“Addison Whitney”) (acquired in June 2007).





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





Our
      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. During the third quarter of
      2007, we acquired Chandler Chicco Agency (“CCA”), one of the largest
      privately-held healthcare public relations firms in the world, and Innovative
      Health Strategies, Inc., iProcert, LLC and the related AWAC.MD business
      (collectively "AWAC"), a Georgia-based business specializing in cost containment
      and medical consulting solutions. As disclosed in *Acquisitions
      and Divestitures* below,
      CCA is expected to be reported in the Communications’ segment, while we have not
      determined the segment AWAC will report into, but are considering adding a
      fourth segment called inVentiv Patient Outcomes. AWAC’s impact on the 2007
      consolidated financial statements is not expected to be material.





19


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 significant 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. The following is a summary of our acquisitions to date:





**Acquisition**
            **Type
                of Business**
            **Segment
                (“inVentiv”)**
            **Headquarters
                Location**
            **Month
                Acquired**Chandler
                Chicco Agency
            Public
                relations
            Communications
            New
                York
            July
                2007AWAC
            Medical
                cost containment services
            (1)
            Georgia
            July
                2007Addison
                Whitney
            Global
                branding consultancy
            Communications
            North
                Carolina
            June
                2007Strategyx
            Strategic
                consulting
            Commercial
            New
                Jersey
            June
                2007Ignite
                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
                2006inVentiv
                Communications, Inc.
            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





(1)
      -
      inVentiv has
      not
      determined the segment AWAC will report into, but is considering adding a fourth
      segment called inVentiv Patient Outcomes.





20


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**





CCA,
      acquired in July 2007, includes operations in the United Kingdom and France.
      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. In December 2005, we entered into an exclusive joint venture
      agreement with SIRO Clinpharm Pvt. Ltd., one of India's largest domestic
      contract research organizations, to offer pharmaceutical companies India-based
      clinical data management services. The results of this joint venture are not
      material to our 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 to the Company’s critical accounting policies subsequent to the
      filing of the Company’s Form 10-K for the year ended December 31,
      2006.














21


**Three-Months
      Ended June 30, 2007 Compared to Three-Months Ended June 30,
      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:




**(in
                thousands, except for per share data)**
            **For
                the Three-Months Ended June 30,****2007**
            **2006**Revenues:
            
            Percentage(1)
            
            Percentage(1)inVentiv
                Clinical
            $46,966
            20.2%
            $38,419
            21.0%inVentiv
                Communications
            85,704
            36.9%
            64,535
            35.3%inVentiv Commercial
            99,764
            42.9%
            80,025
            43.7%Other
            
            
            --
            --Total
                revenues
            232,434
            100.0%
            182,979
            100.0%Cost
                of services(1)
                (2):inVentiv
                Clinical
            31,545
            67.2%
            25,028
            65.1%inVentiv
                Communications
            53,191
            62.1%
            40,469
            62.7%inVentiv Commercial
            78,138
            78.3%
            62,363
            77.9%Other
            
            
            --
            --Total
                cost of services
            162,874
            70.1%
            127,860
            69.9%Selling,
                general and administrative expenses
            54,445
            23.4%
            34,938
            19.1%Total
                operating income
            15,115
            6.5%
            $20,181
            11.0%Interest
                expense
            (3,884)
            (1.7)%
            (2,241)
            (1.2)%Interest
                income
            502
            0.2%
            362
            0.2%Income
                from continuing operations before income tax provision,minority
                interest in income of subsidiary and income from equityinvestments
            11,733
            5.0%
            18,302
            10.0%Income
                tax (provision) benefit
            (4,445)
            (1.9%)
            1,748
            1.0%Income
                from continuing operations before minority interest in
              income
                of subsidiary and income from equity investments
            7,288
            3.1%
            20,050
            11.0%Minority
                interest in income of subsidiary
            (234)
            (0.1)%
            (352)
            (0.2)%Income
                from equity investments
            111
            0.1%
            166
            0.1%Income
                from continuing operations
            7,165
            3.1%
            19,864
            10.9%Income
                from discontinued operations:Gains
                on disposals of discontinued operations, net of taxes
            92
            --
            1,115
            0.6%Income
                from discontinued operations
            92
            --
            1,115
            0.6%Net
                income
            $7,257
            3.1%
            $20,979
            11.5%Earnings
                per share:Continuing
                operations:Basic
            $0.23
            
            $0.68Diluted
            $0.22
            
            $0.66Discontinued
                operations:Basic
            $0.00
            
            $0.04Diluted
            $0.01
            
            $0.03Net
                earnings:Basic
            $0.23
            
            $0.72Diluted
            $0.23
            
            $0.69





(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.


22





***Revenues*** :
      Revenues increased by approximately $49 million, or 27%, to $232 million during
      the second quarter of 2007, from $183 million during the second quarter of
      2006.
      Net revenues increased by approximately $39 million, or 25%, to $194 million
      during the second quarter of 2007, from $155 million in the second quarter
      of
      2006.




inVentiv
      Clinical’s revenues were $47 million during the second quarter of 2007, an
      increase of $9 million compared to $38 million during the second quarter of
      2006. inVentiv Clinical revenues accounted for 20% of total inVentiv revenues
      during the second quarter of 2007. Revenues in inVentiv Clinical were
      higher in 2007 predominantly due to increased placement of temporary personnel
      and increased traction in functional outsourcing.




inVentiv
      Communications’ revenues were $86 million during the second quarter of 2007, an
      increase of $21 million or 33% from the second quarter of 2006. inVentiv
      Communications’ revenues accounted for 37% of total inVentiv revenues during the
      second quarter of 2007. Approximately $11 million of this increase relates
      to
      recent business wins in various advertising and communications' agencies. 
The remaining increase is due to the incremental revenue relating to the
      acquisitions of Ignite, Chamberlain and Addison Whitney in 2007.




Revenues
      in our inVentiv Commercial segment were $100 million during the second quarter
      of 2007, an increase of $20 million, or 25% from the second quarter of 2006.
      inVentiv Commercial revenues accounted for 43% of total inVentiv revenues for
      the second quarter of 2007. The second quarter of 2007 benefited from several
      new wins and expansions. We continue to benefit from the industry trend towards
      cost efficient solutions, and are positioned as a market leader in flexible
      sales force solutions.





***Cost
      of Services*** :
      Cost of
      services increased by approximately $35 million or 27%, to $163 million during
      the second quarter of 2007 from $128 million in the first quarter of 2006.
      Cost
      of services as a percentage of revenues was 70% during the second quarter of
      2007 and 2006.





inVentiv
      Clinical’s cost of services increased by approximately $7 million, or 26%, to
      $32 million during the second quarter of 2007 from $25 million during the second
      quarter of 2006. This increase is consistent with the increase in the segment’s
      revenue. Cost of services as a percentage of revenues was 67% and 65% during
      the
      second quarter of 2007 and 2006, respectively.





inVentiv
      Communications’ cost of services increased by 31% to $53 million during the
      second quarter of 2007 when compared to the second quarter of 2006. Most of
      this
      variance is due to increased business described above in *Revenues* .
      Cost of
      services as a percentage of the segment’s revenues slightly decreased from 63%
      during the second quarter of 2006 to 62% during the second quarter of 2007.





Cost
      of
      services at inVentiv Commercial increased by approximately $16 million, or
      25%,
      to $78 million in the second quarter of 2007, mainly due to the increase in
      revenues. Cost of services was 78% of inVentiv Commercial revenues during the
      second quarter of 2007 and 2006.





***Selling,
      General and Administrative Expenses (“SG&A”)*** :
      SG&A expenses increased by approximately $19 million, or 56%, to $54 million
      during the second quarter of 2007 from $35 million during the second quarter
      of
      2006.




SG&A
      expenses at inVentiv Clinical were approximately $13 million during the second
      quarter of 2007, compared to $10 million during the second quarter of 2006
      due
      to increased selling expense and commissions from additional business and
      additional staffing requirements.






SG&A
      expenses at inVentiv Communications increased $4 million to $20 million during
      the second quarter of 2007. New acquisitions contributed to most of this
      increase.






SG&A
      expenses at inVentiv Commercial increased by approximately $11 million to $18
      million during the second quarter of 2007 from $7 million during the second
      quarter of 2006. The majority of this increase was due to recording a
      receivables reserve relating to a client that declared Chapter 11 bankruptcy
      subsequent to the end of the second quarter of 2007. We have never had a
      collections issue as a result of client bankruptcy, with virtually all of our
      clients having excellent payment histories, and we do not believe the
      circumstances giving rise to this receivables reserve are likely to reoccur
      in
      future periods. SG&A also increased 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.




23




Other
      SG&A was approximately $4.0 million for the second quarter of 2007, an
      increase of approximately 44% from the second 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.






***Interest
      Expense:*** Interest
      expense increased by approximately $1.6 million from the second quarter of
      2006
      to the second quarter of 2007. For the three months ended June 30, 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 approximately $0.3 million of additional interest expense per quarter due
      to
      ineffectiveness.




***Provision
      for Income Taxes*** : The
      effective tax rate for the quarter ended June 30, 2007 was 38.3%. The rate
      included approximately $0.6 million of a tax benefit ($0.4 million after federal
      tax effect) relating to state taxes settled. The income tax benefit for the
      quarter ended June of 2006 was $1.7 million. Included in the income tax benefit
      was approximately $9.1 million benefit relating to net operating losses of
      a
      previously-divested unit. 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.





***Net
      Income and Earnings Per Share (“EPS”)*** *:* inVentiv’s net income decreased by approximately $14 million to $7 million
      during the second quarter of 2007 when compared to the second quarter of 2006.
      Diluted earnings per share decreased to $0.23 per share during the second
      quarter of 2007 from $0.69 per share during the second quarter of 2006. 
Excluding the impact of the increase in the uncollectible receivable reserve
      in
      2007 and the one-time tax benefits in 2006, overall EPS and net income increased
      between quarters because of increased business wins and new
      acquisitions.


24


**Six-Months
      Ended June 30, 2007 Compared to Six-Months Ended June 30,
      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:




**(in
                thousands, except for per share data)**
            **For
                the Six-Months Ended June 30,****2007**
            **2006**Revenues:
            
            Percentage(1)
            
            Percentage(1)inVentiv
                Clinical
            $88,407
            19.5%
            $70,855
            19.9%inVentiv
                Communications
            165,869
            36.5%
            116,987
            32.8%inVentiv Commercial
            200,114
            44.0%
            168,814
            47.3%Other
            
            
            --
            --Total
                revenues
            454,390
            100.0%
            356,656
            100.0%Cost
                of services(1)(2):inVentiv
                Clinical
            60,577
            68.5%
            47,872
            67.6%inVentiv
                Communications
            105,607
            63.7%
            72,635
            62.1%inVentiv Commercial
            159,518
            79.7%
            132,160
            78.3%Other
            
            
            --
            --Total
                cost of services
            325,702
            71.7%
            252,667
            70.8%Selling,
                general and administrative expenses
            95,030
            20.9%
            64,925
            18.2%Total
                operating income
            33,658
            7.4%
            $39,064
            11.0%Interest
                expense
            (7,446)
            (1.6%)
            (3,898)
            (1.1)%Interest
                income
            1,342
            0.3%
            1,096
            0.3%Income
                from continuing operations before income tax provision,
              minority
                interest in income of subsidiary and income (loss) from
                equity
              investments
            27,554
            6.1%
            36,262
            10.2%Income
                tax provision
            (9,859)
            (2.2)%
            (5,436)
            (1.5)%Income
                from continuing operations before minority interest in
              income
                of subsidiary and income (loss) from equity investments
            17,695
            3.9%
            30,826
            8.7%Minority
                interest in subsidiary
            (489)
            (0.1)%
            (676)
            (0.2)%Income
                (loss) from equity investments
            346
            0.1%
            (144)
            --Income
                from continuing operations
            17,552
            3.9%
            30,006
            8.5%Income
                from discontinued operations:Gains
                on disposals of discontinued operations, net of taxes
            175
            0.0%
            1,221
            0.3%Income
                from discontinued operations
            175
            0.0%
            1,221
            0.3%Net
                income
            $17,727
            3.9%
            $31,227
            8.8%Earnings
                per share:Continuing
                operations:Basic
            $0.57
            
            $1.05Diluted
            $0.55
            
            $1.01Discontinued
                operations:Basic
            $0.00
            
            $0.04Diluted
            $0.01
            
            $0.04Net
                earnings:Basic
            $0.57
            
            $1.09Diluted
            $0.56
            
            $1.05





(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.


25





***Revenues*** :
      Revenues increased by approximately $97 million, or 27%, to $454 million during
      the first half of 2007, from $357 million in the first half of 2006. Net
      revenues increased by approximately $72 million, or 24%, to $370 million during
      the first half of 2007, from $298 million in the first half of
      2006.




inVentiv
      Clinical’s revenues were $88 million during the first half of 2007, an increase
      of $17 million compared to $71 million during the first half of 2006. Revenues
      in inVentiv Clinical were higher in 2007 predominantly due to increased
      placement of temporary personnel and new business wins to provide functional
      outsourcing services. Also, in April 2006, the Company acquired Synergos, which
      complements the segment by strengthening the functional outsourcing
      service.




inVentiv
      Communications’ revenues were $166 million during the first half of 2007, an
      increase of $49 million or 42% from the first half of 2006. inVentiv
      Communications’ revenues accounted for 37% of total inVentiv revenues during the
      first half of 2007. Approximately $18 million of this increase relates to recent
      business wins in various advertising and communications' agencies.  The
      remaining increase is due to incremental revenue relating to the timing of
      2007
      acquisitions of Ignite, Chamberlain and Addison Whitney, and 2006 acquisitions
      of Adheris and JSAI.




Revenues
      in our inVentiv Commercial segment were $200 million during the first half
      of
      2007, an increase of $31 million, or 19%, from the first half of 2006. Most
      of
      the variance relates to new business wins, which more than offset revenues
      from
      contracts that wound down in the natural course.





***Cost
      of Services*** :
      Cost of
      services increased by approximately $73 million or 29%, to $326 million for
      the
      first half of 2007 from $253 million in the first half of 2006. Cost of services
      increased as a percentage of revenues to 72% from 71% in the first half of
      2007
      and 2006, respectively.





inVentiv
      Clinical’s cost of services increased by approximately $13 million, or 27%, to
      $61 million during the first half of 2007 from $48 million during the first
      half
      of 2006. Cost of services as a percentage of revenues slightly increased from
      68% during the first half of 2006 to 69% during the same period in 2007 as
      we
      made infrastructure investments in preparation for a material functional
      outsourcing win with a top 20 pharmaceutical company.





inVentiv
      Communications’ cost of services increased by approximately $33 million, or 45%,
      to $106 million during the first half of 2007 from $73 million during the first
      half of 2006. Cost of services as a percentage of revenues slightly increased
      from 62% during the first half of 2006 to 64% during the same period in 2007
      driven by the mix of business and related service offerings during the period.





Cost
      of
      services at inVentiv Commercial increased by approximately $27 million, or
      21%,
      to $159 million during the first half of 2007 from $132 million during the
      first
      half of 2006. Cost of services as a percentage of revenues slightly increased
      from 78% during the first half of 2006 to 80% during the same period in 2007.
      The increase in the cost of sales percentage was driven by the increase in
      limited scope sales force services, including the new on-boarding program with
      a
      top 20 pharmaceutical company.





***SG&A*** :
      SG&A expenses increased by approximately $30 million, or 46%, to $95 million
      from $65 million in the first half of 2007 and 2006, respectively.




SG&A
      expenses at inVentiv Clinical was approximately $23 million in the first half
      of
      2007, compared to $18 million during the same period in 2006 due to increased
      selling expense and commissions from additional business; additional staffing
      requirements; and SG&A expense from Synergos, which was acquired on April 1,
      2006.






SG&A
      expenses at inVentiv Communications increased $9 million to $36 million during
      the first half of 2007. New acquisitions contributed to the majority of this
      increase.






SG&A
      expenses at inVentiv Commercial increased by approximately $14 million to $28
      million during the first half of 2007 from the first half of 2006. The majority
      of this increase was due to recording a receivables reserve relating to a client
      that declared Chapter 11 bankruptcy subsequent to the end of the second quarter
      of 2007. We have never had a collections issue as a result of client bankruptcy,
      with virtually all of our clients having excellent payment histories, and we
      do
      not believe the circumstances giving rise to this receivables reserve are likely
      to reoccur in future periods. SG&A also increased 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.




26











Other
      SG&A increased by approximately 50% from the first half of 2006 to the first
      half of 2007. 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.




***Provision
      for Income Taxes*** : The
      effective tax rate for the first half of 2007 was 36.0%. The rate included
      approximately $0.6 million of a tax benefit ($0.4 million after federal tax
      effect) relating to state taxes settled, $0.1 million of a tax detriment
      relating to interest on unrecognized tax benefits and $1.0 million of a tax
      benefit relating to federal tax benefits of state tax reserves. The effective
      tax rate for the first half of 2006 was 15.0%. The rate included approximately
      $9.1 million tax benefit relating to net operating losses of a
      previously-divested unit. 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.





***Net
      Income and Earnings Per Share (“EPS”)*** *:* inVentiv’s net income decreased by approximately $13 million to $18 million
      during the first half of 2007 when compared to the first half of 2006. Diluted
      earnings per share decreased to $0.56 per share during the first half of 2007
      from $1.05 per share during the first half of 2006. Excluding the impact of
      the
      increase in the uncollectible receivable reserve in 2007 and the one-time tax
      benefits in 2006, overall EPS and net income increased over the respective
      periods because of increased wins and new acquisitions.













































































27


**Liquidity
      and Capital Resources**





At
      June
      30, 2007, inVentiv had $41 million of unrestricted cash and equivalents, a
      decrease of $39 million from December 31, 2006. For the six-months ended June
      30, 2006 compared to June 30, 2007, cash provided by operations decreased by
      $22
      million from a source of $40 million to a source of $18 million. Cash used
      in
      investing activities increased from $62 million to $79 million for the
      six-months ended June 30, 2006 and 2007, respectively. Cash provided by
      financing activities increased from a use of $1 million to a source of $23
      million over the same comparative periods.





Cash
      provided by operations was $18 million during the six-months ended June 30,
      2007, while cash provided by operations was $40 million in the six-months ended
      June 30, 2006. This decrease was, in large part, due to lower net income and
      the
      timing of certain client advances and payments. During the six-months ended
      June
      30, 2007, Communications made vendor payments to satisfy client projects. The
      funds were received in the fourth quarter of 2006, but not utilized until the
      first quarter of 2007, resulting in a decrease in Client Advances and Unearned
      Revenue during the six-months ended June 30, 2007.





Cash
      used
      in investing activities was $79 million for the six-months ended June 30, 2007
      compared to $62 million used during the same period in 2006. During the six
      months ended June 30, 2006, the Company paid approximately $50 million of cash,
      net of cash acquired, for the acquisitions of Adheris, Synergos and JSAI and
      approximately $8 million of cash relating to earnout contingency payments from
      previous acquisitions. During the six months ended June 30, 2007, approximately
      $50 million of cash related to the acquisitions of Ignite, Chamberlain, Addison
      Whitney and Strategyx, while approximately $23 million of cash related to
      earnout contingency payments from previous acquisitions.





Cash
      provided by financing activities was $23 million for the six-months ended June
      30, 2007, compared to $1 million used in financing activities for the six-months
      ended June 30, 2006. As discussed below, $25 million was borrowed from the
      revolving credit facility, of which $20 million was outstanding at June 30,
      2007, to help finance the Ignite, Chamberlain, Addison Whitney and Strategyx
      acquisitions and 2006 earnout payments from past acquisitions.





Our
      principal external source of liquidity is our syndicated, secured credit
      agreement, which the Company entered into with UBS AG, Stamford Branch, and
      others in connection with the inVentiv Communications, Inc. acquisition. As
      of
      June 30, 2007, we complied with the requirements, including all covenants,
      of
      the credit facility.





On
      July
      6, 2007, the Company entered into an Amended and Restated Credit Agreement.
      The
      key features of the Amended and Restated Credit Agreement are as
      follows:




·
            A
                $330 million term loan facility was made available to inVentiv in
                a single
                drawing, whichwas
                used to




·
            refinance
                existing balances of approximately $20 million and $164 million,
                respectively, under the prior revolving and term loan facilities




·
            fund
                the acquisitions of Chandler Chicco Agency and AWAC, and




·
            pay
                the fees associated with the new credit facility, with the balance
                retained by inVentiv as working capital.






The
        credit agreement also includes up to $20 million in additional term loans
        (“delayed draw term loans”) that may be advanced no later than January 6, 2008,
        a $50 million revolving credit facility, of which $10 million is available
        for
        the issuance of letters of credit, and a swingline facility. The term loan
        will
        mature on the seventh anniversary of the Amended and Restated Credit Agreement,
        with scheduled amortization of 1% per year during years one through six and
        94%
        during year seven. The delayed draw term loans will mature on the seventh
        anniversary of the Amended and Restated Credit Agreement, with scheduled
        quarterly amortization of 0.25% per quarter and the balance becoming due
        on such
        seventh anniversary. The revolving loans will mature on the sixth anniversary
        of
        the Amended and Restated 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 and 50% of certain issuances of equity securities of
                inVentiv
                and its subsidiaries, 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 Amended and Restated
                Credit Agreement in respect of term loans (including delayed draw
                term
                loans) that are repaid or prepaid may not be reborrowed. Amounts
                borrowed
                under the Amended and Restated Credit Agreement in respect of revolving
                loans may be paid or prepaid and
                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.




28




·
            The
                Amended and Restated 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 and transactions with
                affiliates. The Amended and Restated Credit Agreement also includes
                a
                financial covenant under which inVentiv is required to maintain a
                total
                leverage ratio that does not exceed, as of the last day of any four
                consecutive fiscal quarters, 4.0 to 1.0 through December 31, 2009
                and 3.5
                to 1.0 thereafter.




Effective
      October 2005, the Company entered into a three- year swap arrangement for $175
      million to hedge against the original $175 million loan arrangement entered
      into
      to facilitate the acquisition of inVentiv Communications, Inc. The Company
      continues to maintain this swap arrangement to hedge against the new $330
      million term loan facility described above.





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, the Company acquired Ignite for approximately $20 million in cash and
      stock, Chamberlain for approximately $13 million in cash and stock, Addison
      Whitney for approximately $18 million in cash and stock and Strategyx for
      approximately $8.5 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
      June 30, 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.





29


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.








30





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





**Long-Term
      Debt Exposure**





At
      June
      30, 2007, the Company had $163.8 million debt outstanding under its secured
      term
      loan, which was subsequently increased to $330 million on July 6, 2007 upon
      the
      closing of the Amended and Restated Credit Agreement, as described under
“Liquidity and Capital Resources” in Item 2 above. The Company 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 June 30, 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 original six-year $175 million loan arrangement
      entered into to facilitate the acquisition of inVentiv Communications, Inc..
      The
      Company entered into this interest rate swap agreement to modify the interest
      rate characteristics of its outstanding long-term debt. At 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 half
      of
      2007, the fair market value of the derivative asset increased by $0.1 million
      to
      approximately $1.3 million. Approximately $0.6 million of the $0.1 million
      net
      adjustment was recorded as interest expense due to ineffectiveness, while the
      remaining $0.7 million ($0.4 million, net of taxes) was recorded as a increase
      to Other Comprehensive Income.





**Foreign
      Currency Exchange Rate Exposure**





The
      Company is not currently affected by foreign currency exchange rate exposure,
      except for any fluctuations in the foreign bank accounts remaining from the
      divestitures of 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 June 30, 2007, the accumulated other comprehensive earnings related
      to
      foreign currency translations was approximately $0.7 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 June 30, 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 June 30, 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 June
      30,
      2007 that have materially affected, or are reasonably likely to materially
      affect, our internal controls over financial reporting.




31




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*******





Except
      for the risk factors identified below, there
      have
      been no other material changes in the risk factors discussed in Item 1A of
      the
      Company’s Form 10-K for the year ended December 31, 2006.We have
      identified the following as material risk factors relative to AWAC, which we
      acquired on July 6, 2007:





***AWAC's
      revenues are dependent on expenditures by*** ***third party administrators ("TPA*** ***s"),
      ERISA self-funded plans, fully insured plans, employer groups, managing general
      underwriters ("MGUs") and insurance carriers. AWAC has not yet penetrated these
      markets deeply, and a variety of factors could prevent it from doing so or
      cause
      the overall levels of expenditures by AWAC's customer base to
      decline.***





AWAC
      has
      not yet deeply penetrated the medical payor marketplace, particularly the TPA
      marketplace. Furthermore, any decline in aggregate demand for medical cost
      containment services could negatively affect AWAC's business. Consolidation
      among AWAC's customer base could negatively affect AWAC by reducing overall
      outsourced expenditures in the medical cost containment area. Furthermore,
      companies may elect to perform medical cost containment services internally
      based on industry and company-specific factors, including competition from
      other
      suppliers.





***AWAC's
      services are subject to evolving industry standards and rapid technological
      changes*** **.**




AWAC
      provides proprietary
      IT-driven cost containment and medical consulting solutions to TPA's ,
      ERISA
      self-funded plans, fully insured plans, employer groups, MGU's and insurance
      carriers. Changes in the technology environment or AWAC's inability to update
      its technology to service clients could impact its financial
      performance.




***The
        nature of AWAC's business may
        expose it to litigation risks.***
 
 Although
        it has not been a party
        to any litigation to date, AWAC may become a party to legal actions related
        to
        the design and management of its service offerings, including, among others,
        medical malpractice actions and contract disputes. AWAC maintains managed
        care
        errors and omissions insurance and other traditional business coverage but
        does
        not insure for medical malpractice since it does not deem itself to be
        practicing medicine. Although we believe that the AWAC business is adequately
        insured, certain types of damages, such as punitive damages, are not covered
        by
        insurance.





The
      following updates our previous risk factor disclosure related to our principal
      credit facility:





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





32


On
      July
      6, 2007, the Company entered into an Amended and Restated Credit Agreement
      with UBS
      AG,
      Stamford Branch and
      others. The outstanding balance under this facility was approximately $330
      million as of the closing date under the facility, which is attributable to
      a
      $330 million secured term loan component. The Amended and Restated Credit
      Agreement also provides for up to $20 million in additional term loans ("delayed
      draw term loans") that may be advanced no later than January 6, 2008, a $50
      million revolving credit facility, of which $10 million is initially available
      for the issuance of letters of credit, and a swingline facility. The term loan
      will mature on the seventh anniversary of the Amended and Restated Credit
      Agreement, with scheduled quarterly amortization of 1% per year during years
      one
      through six and 94% during year seven. The delayed draw term loans will mature
      on the seventh anniversary of the Amended and Restated Credit Agreement, with
      scheduled quarterly amortization of 0.25% per quarter and the balance becoming
      due on such seventh anniversary. The revolving loans will mature on the sixth
      anniversary of the Amended and Restated Credit Agreement. Amounts advanced
      under
      the credit facility must be prepaid with a portion of our "Excess Cash Flow",
      as
      defined in the credit agreement. The credit facility contains numerous operating
      covenants that have the effect of reducing management's discretion in operating
      our businesses, including covenants limiting:





·
            the
                incurrence of indebtedness;





·
            the
                creation of liens on our assets;





·
            sale-leaseback
                transactions;





·
            acquisitions;





·
            guarantees;





·
            payment
                of dividends; and





·
            fundamental
                changes and transactions with
                affiliates.





The
      Amended and Restated Credit Agreement also includes a financial covenant under
      which inVentiv is required to maintain a total leverage ratio that does not
      exceed, as of the last day of any four consecutive fiscal quarters, 4.0 to
      1.0
      through December 31, 2009 and 3.5 to 1.0 thereafter. If we are unable to comply
      with the requirements of the credit facility, our lenders could refuse to
      advance additional funds to us and/or seek to enforce remedies against us.
      Any
      such developments would have a material adverse effect on inVentiv. As of the
      date of this report, we comply with the requirements of our credit
      facility.




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





Please
      see the disclosure in Item 5 of the report, which is incorporated herein by
      reference.





**ITEM
      4.*****Submission
      of Matters to a Vote of Security Holders*******





At
      an annual meeting of the stockholders of the Company, held on June 12, 2007,
      the
      following matters were submitted to a vote of our stockholders, with the
      following votes cast:





(i) 
      the election of eight directors to the Board of Directors for a term of one
      year, expiring at the 2008 Annual Meeting:





**For**
            **Withheld**Eran
                Broshy
            25,884,742
            1,812,082A.
                Clayton Perfall
            27,095,399
            601,425John
                R. Harris
            25,631,808
            2,065,016Per
                G.H. Lofberg
            27,167,654
            529,170Mark
                E. Jennings
            27,296,779
            400,045Craig
                Saxton, M.D.
            22,946,548
            4,750,276Terrell
                G. Herring
            27,142,498
            554,326R.
                Blane Walter
            23,359,756
            4,337,068








(ii)
      the
      ratification of  the appointment of Deloitte and Touche LLP as the
      Company’s independent auditors for 2007:





**For**
            **Withheld**
            **Abstain**
            **Unvoted**Deloitte
                & Touche LLP ratification
            27,613,446
            72,616
            10,761
            --





33


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





*Certain
      Equity Issuances*





On
      June
      1, 2007, in connection with the closing of the acquisition of the assets of
      Addison Whitney, Inc., the Company issued for the account of Addison Whitney,
      Inc. 117,925 unregistered shares of common stock. Also on June 1, 2007, in
      connection with the closing of the acquisition of the assets of Strategyx LLC,
      the Company issued for the account of the former members of Strategyx LLC a
      total of 39,309 unregistered shares of common stock. The common stock issued
      in
      connection with the closing of the acquisitions 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.





*Employment
      Agreement with R. Blane Walter*





On
      August
      7, 2007, the Company entered into an amended employment agreement with R. Blane
      Walter relating to his previously announced appointment as President of the
      Company. Mr. Walter’s employment agreement provides for (i) a base salary of
      $490,000 per annum, (ii) an annual discretionary bonus, pro rated for 2007,
      with
      a bonus range of 0 - 150% (75% target) of the base salary in effect, (iii)
      a
      $1.5 million special equity award in connection with his promotion to President,
      (iv) a $750,000 equity award as part of the Company’s 2008 annual grants, (v) $1
      million in term life insurance coverage and (vi) benefits generally consistent
      with those provided to other executive officers.





In
      the
      event of Mr. Walter's termination without cause or resignation for good reason
      prior to a "change in control", he is entitled under his employment agreement
      to
      (a) a lump sum payment equal to the sum of his base salary and the average
      of
      his awarded bonus for the three years prior to termination and (b) vesting
      of
      all equity incentive awards that would have vested had his employment continued
      for one year from the date of termination. In the event of Mr. Walter's
      termination by reason of death or disability prior to a "change in control",
      he
      is entitled under his employment agreement to a lump sum payment equal to the
      sum of his base salary and the average of his awarded bonus for the three years
      prior to termination. Upon a "change in control" of the Company, Mr. Walter
      is
      entitled to receive a lump sum payment equal to 75% of the sum of his base
      salary and the average of his awarded bonus for the three years prior to
      termination and acceleration of vesting of all options and restricted stock
      awards. In addition, in the event of Mr. Walter's termination without cause
      or
      for good reason, or the termination of Mr. Walter's employment by reason of
      death or disability, within 13 months after a "change in control", he is
      entitled to receive a lump sum payment equal to 75% of the sum of his base
      salary and the average of his awarded bonus for the three years prior to
      termination. Finally, any resignation by Mr. Walter during the 30 days following
      the first anniversary of a "change in control" will be deemed to be a
      resignation for good reason entitling him to the payments and benefits described
      above in relation to a resignation for good reason.





In
      the
      event of Mr. Walter's termination without cause or for good reason, or the
      termination of Mr. Walter's employment by reason of death or disability, he
      will
      be entitled to continuation of health insurance benefits for a period of 36
      months (including the applicable COBRA period) and, except in the case of a
      termination of employment by reason of death, life insurance benefits for a
      period of 18 months. Options that are accelerated as described above will
      generally remain exercisable for the period permitted by Section 409A of the
      Internal Revenue Code, but not for more than two years after the change in
      control (unless executive officers generally are granted a longer
      post-termination exercise period).





*Amendment
      of Certain Executive Employment Arrangements*





On
      August
      6, 2007, we amended equity award documentation with David Bassin, our Chief
      Financial Officer, to provide that 19,835 stock options and 12,092 shares of
      restricted stock would accelerate upon a change in control of the Company.
      Also
      on August 6, 2007, we amended equity award documentation with Terrell Herring,
      our Chief Operating Officer and President and Chief
      Executive Officer of
      inVentiv Commercial, to provide that 136,523 stock options and 36,225 shares
      of
      restricted stock would accelerate upon a change in control of the Company.
      In
      each case, we agreed that all future grants of options and restricted stock
      would provide for immediate vesting upon a change of control of the
      Company.


34





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





10.11.6
            
            Amendment
                to Stock Option Agreement(s)/Restricted Stock Award(s) dated August
                6,
                2007 between the registrant and Terrell Herring10.18.1
            
            Employment
                Agreement, dated as of August 7, 2007 between the registrant and
                R. Blane
                Walter10.21.3
            
            Amendment
                to Stock Option Agreement(s)/Restricted Stock Award(s) dated August
                6,
                2007 between the registrant and David Bassin31.1
            
            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







35








**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.**Date: August
              9, 2007
            By:
            /s/ David
              S. BassinDavid
              S. BassinTitle: Chief
                Financial Officer
              (Principal
                financial officer and duly authorized
                signatory)