Just eight months after the FDA issued a scathing report accusing employees at the contract research firm Cetero of faking research work for clients, the CRO has filed for bankruptcy protection and is angling to sell its assets to the highest bidder.
Last July the FDA set off alarm bells for drug developers which had relied on Cetero for early-phase research work, warning them that they may be on the hook to pay for a do-over after finding hundreds of examples of faked research work over a 5-year period at the company's Houston lab. Significantly, the regulators noted that they doubted that the faked work had created any safety issues, but regulators concurred with the company's independent auditor, who wrote that: "this misconduct appears to be significant enough to cast doubt on the data generated ... If the foundation of the laboratory is corrupt, then the data generated will be also."
According to a piece in Reuters, Cetero said that the FDA had never accused the company of fraud. But as word spread of the accusations against employees the company found itself in a liquidity squeeze. Working with its lenders Cetero has now established the ground rules, and floor prices, for its assets.
The company, which filed for bankruptcy under the name Contract Research Solutions in Case No. 12-11004, listed assets worth up to $10 million and debts in the range of $100 million to $500 million.
- here's the Reuters story