Ladenburg believes that softening margins are the biggest risk for CVD in 2009. With significant additional capacity coming online this year, and current weakness in early development they believe there is risk of underutilization. The firm notes that this may reduce operating margins in 2009. Currently the Co expects margins to suffer in 1H09 as the Chandler facility opens and then improve later in the year as the Greenfield facility fills up and some delayed toxicity work resumes. Should early development business not accelerate in 2H09, the firm believes that there is the potential for pricing decreases to fill these facilities, or for excess capacity.