Encorium Group, the US-based contract research organisation (CRO) that in June signed letters of intent to merge with Linkcon and take over Prologue Research International, reported a 13.6% increase in net revenues to US$8.3 million for the second quarter.

However, operating losses for the three months to 30 June 2008 widened by 34.7% year on year to US$1.47 million, giving a net loss per diluted common share of US$0.07 compared with US$0.04 in Q2 2007.

Encorium is hoping that new business awards, cost-cutting initiatives and the proposed deals with Linkcon, an investment vehicle acquiring acquiring CROs in India, China and Latin America, and Prologue, a US speciality CRO focused on oncology, will “help pave the way to profitability”.

The CRO announced new business awards worth US$5.4 million and US$11.5 million respectively for the second quarter and first half of 2008. Since the end of the quarter, Encorium has signed over US$13.5 million in new business, it added. The company also remains committed to the cost-cutting initiatives launched in the first quarter, which include a renegotiation of Encorium’s North American leasing arrangement.

Dr Kai Lindevall, chief executive officer of Encorium, said the proposed arrangements with Linkcon and Prologue “represent a step towards our previously stated strategy of becoming a global CRO, which will allow us to compete for contracts that have previously been out of reach”.

During the latest quarter, net revenues (which exclude reimbursable out-of-pocket expenses) in Encorium’s European operations increased by US$1.5 million year on year, with a US$835,000 boost from currency fluctuations. North American revenues dropped by US$500,000 due to a decline in the number and value of contracts for active clinical trials during Q2, the company noted.

A full-service contract research organisation based in Wayne, Pennsylvania, Encorium Group was created through the acquisition of Finnish CRO Remedium by US rival Covalent Group in the summer of 2006.