GVK feels the sting after data scandal

Improprieties at a GVK Biosciences facility in India have led some European countries to pull medicines from shelves, and the resulting fallout is cutting into the CRO's profits.

GVK CEO Manni Kantipudi

GVK CEO Manni Kantipudi told Economic Times that the company has suffered about 50 crore rupees ($7.8 million) in cancelations since the problems first came to light in August, and the CRO has struggled to win new orders.

"The number of trials a month have more than halved at 6 to 7 now from 15 to 20 before August," Kantipudi told the newspaper.

The issue began in May, when investigators from France's Agency for Medicines and Health Products Safety examined 9 trials conducted at GVK's Hyderabad facility and discovered that the CRO's workers repeatedly switched out patient ECG scores with those of healthy volunteers.

Those irregularities have cast doubts on bioequivalence data used to support the European approvals of an undisclosed number of drugs, and some countries have yanked their marketing authorizations until sponsors redo the studies. The European Medicines Agency is in the midst of an investigation of its own, expected to decide this month on whether to take continent-wide action on the issue.

GVK has said it complied with regulators' requests and provided evidence that all of the other aspects of bioequivalence testing--like dosing, blood sampling and processing--were handled properly.

The ongoing saga has become a serious setback for the Indian CRO, which had been expanding its operations throughout and beyond India over the past year. The fast-growing company has quickly transitioned from a local player into an international entity, making its way into the U.S. through a buyout of California's Aragen Bioscience earlier this year. Among the CRO's clients are Astellas, Bayer, Endo Health Solutions ($ENDP), Onconova ($ONTX) and the FDA.

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