Report: CRO with a scandal-plagued past shuts down, leaving patients stranded

Closed Sign

PRACS Institute, the CRO that attempted to rise Phoenix-like from the ashes of scandal-plagued Cetero Research, has reportedly slammed its doors shut, laying off hundreds of workers with virtually no notice and leaving dozens of trial participants stranded and unpaid.

Regular readers of FierceBiotech will have no trouble recalling Cetero. An FDA investigation singled out the Houston lab of the North Carolina company, citing lab workers for systematically filing fake work hours and raising questions about the validity of the early-stage trials that it had done for a range of drug developers, large and small. Regulators going over the books found 1,900 instances over a 5-year period in which the lab technicians cited for doing research work weren't even in the facility. That led the FDA to conclude that Cetero workers may have fixed their studies, punting any data they didn't like and ensuring it delivered desired results.

In a later settlement, the FDA accepted the validity of most of the studies, though it ordered that studies conducted between April 1, 2005, and Feb. 28, 2008, and subsequently submitted would need a complete redo or at least a reanalysis, if stable samples were available.

The damage, though, had been done.

The probe left Cetero so badly mauled it soon after filed for bankruptcy protection. Last summer the company was bought out and given a new name, PRACS Institute, and relocated its headquarters to Fargo, ND, under CEO James Carlson.

Employees told the Grand Forks Herald, though, that the re-launch of the company crashed on Wednesday as company officials told stunned workers they were locking up.

"[I am] kind of shocked, I am blown away. [We] heard nothing at all. We were told thank you for hanging with us through this tough time," PRACS employee Gabby Kedrowski told the newspaper.

The shock waves spread at least as far as St. Louis, where the CBS affiliate and hometown newspaper reports employees hung up a sign saying all studies were canceled and walked away, leaving some trial participants high and dry. One volunteer who had been promised $1,800 to participate in a 51-hour study says a lab employee told him that the company had filed for bankruptcy.

"I've been in a period of unemployment and an inability to find some full-time work," he told the TV station. "I relied on this money more than I wished I had."

PRACS' website includes this pledge: "As the largest and most experienced provider of early phase research, we will ensure a flexible approach and passionate staff to deliver timely, accurate and quality results with integrity."

A call to the company's office in Fargo--picked up by voice mail--was not immediately returned this evening.

- read the story from the CBS affiliate KMOX in St. Louis

Related Stories:
New CRO owners hope new name, new CEO will clear way to new rep
Cetero execs look for a silver lining in bankruptcy sale
FDA accusations of 'corrupt' lab practices push Cetero into bankruptcy 
Cetero fires back at scathing FDA accusations

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