Investors will be bracing for more bad news from Encorium, the US-based contract research organisation (CRO) whose star has been falling since it failed to deliver a planned merger and acquisition last year.

The company has asked for more time to file its annual report for 2008 so that it can complete an impairment analysis of its goodwill. Encorium has already conducted an interim goodwill-impairment analysis that produced a non-cash charge of US$1.9 million levied in the third quarter.

At the time, the CRO said it would “complete the final step in its impairment analysis in the fourth quarter of 2008 and, if required, adjust the balances of goodwill and intangibles accordingly”. Operating losses for the third quarter were US$3.9 million, compared with a US$1.5 million operating loss in the same quarter of 2007.

Now Encorium has filed a Form 12b-25 with the US Securities and Exchange Commission to postpone the submission of its Form 10-K annual report for 2008.

“Additional time is required to determine whether a non-cash charge to earnings will need to be reflected on the Company’s consolidated statement of operations and consolidated balance sheet for the year ended December 31, 2008,” it stated, adding that any such charge would be in addition to the third-quarter impairment levy. The CRO said it would make an announcement on the timing of its earnings release “as soon as practicable”.

In September 2008 Encorium withdrew from a deal to globalise its operations through a merger with investment vehicle Linkcon. The following month it compounded the damage by announcing it was postponing negotiations to acquire US CRO Prologue Research International, settling instead for a strategic partnership “while leaving open the possibility of restarting negotiations relating to a merger of the two entities at a later date”.