It was interesting to see Waltham, Mass.-based Parexel, a global contract research organization (CRO), remaining unfazed in the hot phase I clinical research market. Earlier this month, Parexel agreed to acquire California Clinical Trials and Behavioral and Medical Research for $65 million. A key part of the deal is a 51-bed phase I unit that would boost Parexel’s presence in the phase I market.

Parexel could have become gun shy about phase I last March, when it took some heat after a phase I trial it was conducting for biotech company TeGenero in a London hospital resulted in six cases of serious illness. TeGenero has since gone bankrupt...

In the past year, the phase I market has been marked by capacity constraints, acquisitions and some controversy that has contributed to shifts in market share. Following numerous legal and regulatory problems at its Florida phase I units, SFBC, a CRO, shut down its operations there in May and sold key assets, including a clinical laboratory, to Allied Research International of Canada.

A milestone deal in the phase I market came in June when Radiant Research sold eight units to phase I leader Covance for $65 million. Recently, and last week, Omaha, Neb.-based Qualia Clinical Services opened a new 160 bed phase I unit. And pharmaceutical company AstraZeneca has opened its first phase I unit in the U.S., in Wilmington, Del.

It is clear that phase I is a place that global CROs and sponsors have to be as they try to find ways to eliminate poor drug candidates before they enter larger and much more expensive phase II and III trials.