Cetero Research has completed its planned asset sale to lenders, overhauled the company’s management, changed its identity and relocated its headquarters.
The US-based early-phase contract research organisation (CRO) filed for bankruptcy protection in March as regulatory and ensuing financial problems with studies conducted at the company’s Houston bioanalytical laboratory came to a head.
As part of that process, Cetero has now been sold to an investor group led by Freeport Financial and has re-emerged under new management as PRACS Institute.
In this case ‘new’ means recycling the past to some extent: the name PRACS comes from one of the original components of Cetero Research when the CRO was formed in 2006.
Moreover, PRACS Institute was founded in Fargo, North Dakota, where the renamed Cetero Research now moves; and PRACS founder James Carlson has been appointed chief executive officer of the reconstituted CRO – a position he once held at the legacy PRACS.
Chapter 11 filing
When Cetero Research made its Chapter 11 filing in the United States Bankruptcy Court for the District of Delaware, the stated aim was to “maximise the recovery of all creditor constituencies” by selling off substantially all of the company’s assets to lenders through a so-called ‘stalking horse’ procedure and credit bid.
The company had run into financial difficulties after the US Food and Drug Administration raised concerns in July 2011 about the integrity of bioequivalence and bioavailability data generated by the Houston facility between April 2005 and June 2010.
Many of the studies in question had to be repeated, re-analysed or verified through an independent third-party audit.
With the sale to the investor group led by Freeport now finalised, Cetero said it had reached a “major milestone” in its re-organisation efforts.
Over recent months, the CRO has been engaging with lenders and stakeholders to plan “a growth-filled future for the company”, it said.
As a first step in this process, the board of directors has made three executive appointments, namely:
• James Carlson, as chief executive officer. Carlson has more than 30 years’ experience of early-phase research, including his stint as co-founder and CEO of the original PRACS Institute from 1983 to 2006.
PRACS was sold to investor holding company Contract Research Solutions (CRS) in February 2006 (CRS). Cetero Research was subsequently formed from that base and two other contract research businesses, BA Research International of Houston, Texas and Gateway Medical Research of St Louis, Missouri.
• Mark Ubert as chief financial officer. Ubert joined Cetero Research in 2009 as corporate controller.
• John Pottier as executive vice president, business development. Pottier joins the ‘new’ PRACS from Worldwide Clinical Trials. He had previously served in business development roles at Novum Research, Cetero Research, PRACS Institute and the Clinical Research Foundation.
The headquarters of the former Cetero Research will transfer from Cary, North Carolina to Fargo, where the legacy PRACS Institute maintains a 250,000 sq ft clinical pharmacology unit.
“We have a lot of work ahead of us, and we look forward to strengthening our organisation and integrating service offerings,” Carlson commented.
“We will continue to uphold the company's commitment to the delivery of reliable, quality data and on-time study results, as well as the as well as the safety of our study participants.”