Southborough, Mass.-based contract research organization (CRO) Averion is restructuring its senior management team in an effort to grow its services and improve its bottom line.

The CRO, which specializes in oncology, cardiovascular disease and medical devices, appointed Peter Gonze president and James McGuire chairman of the board of directors. Gonze, who joined the company a year ago as executive vice president of global business development, will be responsible for global operations and business development. McGuire was formerly president of private equity investor NJK Holding Corporation, an affiliate of Cumulus Investors, Averion’s second largest stakeholder.

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Covance officially closed a deal with Merck earlier this week to provide genomics analysis services to the drug developer for the next five years. Under the terms of the $145-million agreement, the contract research organization (CRO) acquired Merck’s Seattle-based Gene Expression Laboratory. All Merck employees related to the Seattle facility became Covance employees as of August 17.

Covance also announced this week that it is delaying plans to construct a $145-million preclinical toxicology testing facility in Virginia, a site that was purchased from Eli Lilly in 2007. Construction will be delayed for up to two years, Covance said. In its Q2 2009 financial statement, released in July, the company attributed a drop in early-stage revenues to a drop in preclinical demand.

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Struggling eClinical company Datatrak improved its financial outlook in the second quarter, cutting its net loss to $(39,000), or $0.00 per share on a basic and diluted basis, compared to a net loss of $(16,000,000), or $(1.17) per share, during the same period last year.

The Cleveland-based company’s revenues dipped 19% in Q2 to $1,831,000, down from $2,249,000 last year. Year-to-date revenues for 2009 were $3,917,000, a decrease of 10% from last year, and net loss for the first half of 2009 was $(827,000), or $(0.06) per share on a basic diluted basis, compared to a net loss of $(18,232,000), or $(1.33) per share in 2008.

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Serbia celebrated International Day of Clinical Trials, which was organized by the Section for Clinical Pharmacology (SCP) of the Serbian Medical Association (SMA). Founded in Belgrade in 1872, the Serbian Medical Association is the largest professional association of doctors in Serbia, who, through their sections, work on development of the medical profession and science in Serbia. The celebration was attended by physicians in all specialties, representatives of Serbian hospitals, contract research organizations (CROs) working in Serbia, sponsor representatives, as well as the management of the Serbian Medical Association.

The International Day of Clinical Trials was begun in Serbia in 2007, the same year that the European Union Clinical Trial Directive was passed by the Ministry of Public Health of the Republic of Serbia and incorporated in the Serbian Act, which encompasses the regulations governing the clinical trials of drugs, procedures and contains the documents of clinical trial approval published in the “Official Gazette of the Republic of Serbia, No. 19/2007.”  It is celebrated on May 20 to commemorate the first comparative trial conducted in 1747 on 12 sailors afflicted with scurvy.  

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Up until a year ago, Gurnee, Ill.-based contract research organization (CRO) Essential CRO conducted most of its work in the United States, with a few projects in Canada and Mexico. Today, as a result of a strategic partnership with India-based Ecron Acunova, the company is growing its global footprint into India and Eastern Europe and plans to expand even more in the future.

Essential CRO and Ecron Acunova began bidding together on global projects last year, and the companies are now working on several global projects together. Because Essential CRO is not an integrated CRO (the company does not offer its own data management and statistics services, for example), the company is used to partnering with other CROs for services. However, this is the first strategic alliance of its kind for the company because it enables them to expand into new areas of the world, not just services.

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In Medidata Solutions’ first financial results since completing its initial public offering in June, the clinical trial software company’s second quarter net revenues jumped $8.3 million to $34 million, compared with $25.7 million for the same period last year.

The company attributed the revenue growth to a $6.4-million increase in application-services revenues and a $1.8-million boost in professional services.

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Covance and MDS Pharma Services both recently earned standard and supplementary accreditation for the conduct of clinical pharmacology in Europe by the Medicines and Healthcare products Regulatory Agency (MHRA).

Covance received accreditation for its Leeds, United Kingdom, clinical research unit, which conducts first-in-human studies.

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Chinese contract research organization (CRO) WuXi PharmaTech reported another quarter of profit growth with a 7% increase compared to the same period last year despite a drop in revenues.

WuXi’s second-quarter 2009 gross profit grew to $27.1 million, up from $25.4 million in the second quarter 2008. Net revenues for the quarter decreased 3% from Q2 2008 to $67 million, due to a 69% drop in revenues in the CRO’s manufacturing services division. This decrease was partially offset by 19% growth in the laboratory services unit—the result of stronger demand for WuXi’s drug discovery and development services. According to the company, the majority of the drop in manufacturing services comes from large projects in 2008 that did not recur in 2009.

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Parexel’s fourth-quarter revenue and income took a significant hit due to accounting errors related to the August 2008 acquisition of clinical trials technology company Clinphone, according to the contract research organization’s (CRO’s) financial results released last night.

Parexel had been incorrectly recognizing revenue and direct cost amounts of certain Clinphone-related contracts, rather than deferring the costs as is required by accounting rules. To correct these errors, the company had to reduce its fourth quarter and fiscal year 2009 revenue by $4.1 million and its operating income by $3.9 million. According to Parexel, the accounting changes do not affect the company’s overall business or economics in terms of cash or cash flow.

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Less than a month after announcing the acquisition of eResearch Technology’s EDC offerings, eClinical provider OmniComm Solutions has acquired another EDC business, and chief operating officer Stephen Johnson says this latest deal won’t be the company’s last.

“Our strategy of going out and acquiring complementary technologies is definitely something we’re committed to,” Johnson said.

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At the same timeCharles River Laboratories announced the acquisition of two companies, the preclinical contract research organization (CRO) lowered its full-year guidance for 2009.

In second-quarter financial results released earlier this week, Charles River’s net sales and income both decreased from the same period last year. Sales for the quarter fell 12.5% to $308.2 million, down from $352.1 million in the second quarter of 2008. Net income for Q2 2009 was $34.2 million, or $0.52 per diluted share, compared to net income of $49.1 million, or $0.70 per diluted share, last year.

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Kendle’s net income was cut almost 50% in the second quarter 2009 with income dropping to $3.2 million, or $0.21 per diluted share, compared with net income of $6.3 million, or $0.42 per diluted share in Q2 2008. Net revenues for the quarter were $107.4 million, down from $127 million during the same period last year.

The contract research organization also announced that it is suspending financial guidance for 2009 “due to a combination of factors” and will reassess its guidance policy in 2010. Kendle CEO Candace Kendle did not comment on the financial results when they were released Thursday night. Kendle’s shares rose nine cents to $11.96 in after hours trading.

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BioClinica’s revenues and profits continued to fall in the second quarter, with net income sliced by half from the same period in 2008 to $529,000. Diluted earnings per share were $0.04 compared with $0.10 in the second quarter 2008. Revenues for the Newtown, Pa.-based contract research organization (CRO) also dropped 11% to $17.1 million.

“Although the first half of 2009 was challenging from a new business perspective, we are pleased that our operating results were generally in line with our expectations. Our modest sequential increase in quarterly backlog, to $94.1 million from $93.3 million last quarter is an indication that the market is improving,” president and CEO Mark Weinstein said in a statement.

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Working at the Global Level in China

China’s increasing participation in global drug development programs requires personnel who are experienced working at the global level. Finding such talent is a universal problem, and the problem is exacerbated in emerging markets with shorter clinical research histories.

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Software company Oracle finalized its acquisition of Relsys International, a provider of drug safety and risk management applications, in a deal that Oracle says will extend its leadership in the health sciences industry.

Through this acquisition, Oracle hopes to deliver a suite of software applications that enables customers to identify safety risks earlier in the development cycle, provide greater transparency into safety reporting and allow companies to better perform post-market surveillance.

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Philadelphia-based eResearch Technology (ERT) reported second quarter financial results after the markets closed Thursday. Included in the results were ERT’s electronic data capture (EDC) operations, which were sold to Omnicomm Systems in June.

ERT’s second-quarter revenues were down 32% to $24.2 million, compared to $35.5 million a year ago. EDC licenses and service revenues accounted for $1.1 million of total revenue. The company reported a $500,000 gain on the sale of its EDC operations.

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Covance reported an increase in both early- and late-stage drug development revenues for the second quarter of 2009 compared with the first quarter, but early-stage revenues remain significantly lower than the same period last year.

Early-stage net revenues were $199.8 million in the second quarter—a $7-million increase over the first quarter—but a drop from $213.1 million in Q2 2008.  The contract research organization (CRO) attributed the decrease in revenues to a lower demand in toxicology in 2009. The early-stage segment’s operating income declined 50% from the same period last year to $27.1 million.

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Within days of announcing the pending acquisition of Covance’s interactive voice and web response business, eClinical company Phase Forward announced Monday it has purchased technology company Maaguzi for $11 million cash.

With operations in Indianapolis, Ind., and Morrisville, N.C., Maaguzi provides electronic patient reported outcomes (ePRO) services to the pharmaceutical industry. The acquisition of Maaguzi's lead technology, OutcomeLogix, facilitates Phase Forward’s entry into the ePRO and observational studies market. Maaguzi’s chief operating officer Scott Dixon will join Phase Forward as vice president of its newly formed Outcome Logix Group.

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A new report released last week by the Association of Clinical Research Organizations (ACRO) says clinical trials conducted in the developing world not only match the quality and safety standards of those conducted in the developed world but they also improve the global drug development process.

The study, conducted by VOI Consulting in Ft. Lauderdale, Fla., was initiated by ACRO as a result of recent concern around the quality, safety and ethical standards of the growing clinical trial industry in developing countries. VOI prepared the report based on a review of 121 existing secondary research sources, such as peer-reviewed journals, trade journals, newspapers, U.S. Food and Drug Administration (FDA) inspections and regulatory reports.

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Wayne, Pa.-based contract research organization (CRO) Encorium Group has completed the sale of its U.S. business to Pierrel Research USA, a subsidiary of Italian CRO Pierrel SpA, for $2.7 million.

With the closing, Encorium announced that CEO David Ginsberg had joined Pierrel Research USA as its CEO, and chief operating officer Linda Nardone, Ph.D., has left the company. Pierrel has extended employment to most of Encorium’s U.S. employees and expects the CRO’s U.S. operations to continue largely unchanged.

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Dublin, Ireland-based ICON gave shareholders a triple dose of good news yesterday with its second quarter 2009 earnings release. Revenues, income and earnings per share were all up compared to last year.  Net revenues increased $1.7 million to $220 million and net income jumped $4 million to $22.8 million or 38 cents per share on a diluted basis.

Year-to-date net revenues were $439.8 million, a 5% increase compared with the same period last year, and year-to-date income was $56.2 million compared to $45.9 million last year. The CRO’s net cash as of June 30 was $83.2 million, compared to a net debt of $2.2 million last quarter.

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Wilmington, N.C.-based PPD's second quarter revenues fell nearly $50 million to $355.2 million, but its earnings per share were boosted by the sale of its subsidiary, Piedmont Research Center, which was part of the company's discovery sciences segment.

Second quarter 2009 income from operations was $53.4 million, compared to $69.9 million for the same period in 2008. Second quarter 2009 diluted earnings per share were $0.49, compared to $0.41 for the same period last year. Diluted earnings per share included the after-tax gain on the sale of Piedmont Research Center of $19.4 million, or $0.16 per share.

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India's drug regulator, the Central Drug Standard Control Organization (CDSCO), issued draft rules mandating the registration of clinical research organizations that conduct human studies on drugs, cosmetics and medical devices.

The guidelines, known as Schedule Y-1, require organizations to adhere to standard operating procedures to obtain a license of registration, which is valid for five years as long as the CRO adheres to stated requirements.

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MonitorForHire.com's recently completed management buyout was just the next logical step in growth for the online clinical research staffing company, said co-founder and president Scott Freedman.

Freedman and an unnamed executive purchased MonitorForHire's outstanding ownership from the company's outside investors (which included a global contract research organization) in June for an undisclosed sum.

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Chiltern International reported a 44% revenue increase for the year ended March 31, 2009, due in large part to acquisitions. The UK-based CRO attributed 15% of its growth to acquisitions, including the recent acquisition of Brazil CRO Vigiun.

Chiltern's revenues were 73.7 million pounds ($120.9 million), compared with 51.2 million pounds for year ended March 31, 2008. The CRO's operating profit was 244,000 pounds ($400K), compared with a loss of 1.1 million pounds in 2008.

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