Troubled Waters Put CFOs on the Move
Chief financial officers are on the move of late in the clinical research industry with a number of long-time industry veterans leaving their posts – some for reasons unknown.
The latest bolt from the blue was Morrisville, N.C.-based eClinical company etrials’ James Clark, who resigned as secretary, treasurer and CFO on May 31. etrials stated it had temporarily placed corporate controller and vice president of finance Joseph Terpanier, CPA, to the position as it searches for a replacement for Clark. That move may signal his exit was unexpected by the company. Clark helped company founder and former chief excutive officer John Cline take the company public in 2006.
That said, Terpanier’s work dealing with Security and Exchange Commission reporting policies, audit procedures and etrials’ financial systems will be a crucial for the company in the short term.
Although etrials has made significant operational and executive changes to reverse its serious financial difficulties, Chip Jennings, its president and chief executive officer, stated, "Our efforts remain aimed at increasing bookings and backlog in 2008 and entering 2009 ready to accelerate top-line growth and crossover to profitability."
In November 2007, etrials announced deep restructuring and organizational changes it planned for the next two to three quarters, attempting to climb its way to profitability and improve its service delivery issues. etrials reported a challenging first quarter of 2008 with a drop in net service revenue to $3.7 million compared to $4.1 million reported in 2007. The company’s profit losses widen with a $2 million net loss for the quarter (or $0.19 per share) compared with a loss of $900,000 during the first quarter of 2007. etrials stated that its drop in revenue was partly due to new project delays, resulting in about $1 million in lost revenue.
The list goes on.
Although Boston-based contract research organization Averion’s first quarter 2008 revenues rose to about $15.7 million, it had a net loss for quarter of $2.8 million, compared with $1.9 million during the same period in 2007. After Avervion’s CFO Christopher Codeanne resignation from the company, the CRO appointed Lawrence Hoffman, previously executive vice president and general council and chief financial officer for Encorium Group.
And Encorium has had difficulties too. The company reported a net loss for the first quarter of 2008 of $2.0 million compared with income of 109,000 in 2007. Its revenue quarter decreased to $7.5 million from $8.8 million in the year prior. After Hoffman’s departure from Encorium in May, it took the company two weeks to name Philip Calamia as interim replacement.