When the early-stage CRO PRACS Institute filed for Chapter 7 bankruptcy late last week, suddenly dismissing hundreds of workers and leaving their trial subjects unpaid, the company flamed out leaving a Who's Who of the biopharma industry on its list of creditors as dozens of trials suddenly ground to a halt, unfinished.
PRACS had attempted to wipe the slate clean and get a fresh start after its predecessor, Cetero Research, was subjected to caustic criticism by FDA inspectors alarmed by the faked work documents found at a company lab in Houston. In a field where integrity is crucial, the fact that workers were claiming pay for work they never did raised questions about the early-stage data they had posted over a period of years. And Cetero went into Chapter 11 and restructured as PRACS--only to go up in flames a few days ago after a new bankruptcy left its staff stunned.
In its bankruptcy papers, which were first posted by Outsourcing-Pharma, the company lists several divisions of the generic drug maker Actavis ($ACT) on a list of about 200 industry creditors that runs for 20 pages. Others on the list: Boehringer-Ingelheim, Eisai, Endo, little Follica in Waltham, MA, Gilead ($GILD), GlaxoSmithKline ($GSK), Merck ($MRK), Ranbaxy and more. They are owed anywhere from $100 million to $500 million by a company that has $10 million to $50 million in assets.
Outsourcing-Pharma reports that PRACS had some 20 to 30 studies under way in the U.S. with another 10 in Canada. The company shuttered facilities in Fargo, ND; Miami; St. Louis; Toronto and Ontario. None of the workers apparently were paid severance and a company official says that patients will have to stand in line with the rest of the creditors to see if they can be repaid.
- here's the story from Outsourcing-Pharma
- see the bankruptcy document