Encorium Group signs $2m in new contracts, results indicate tough market
A spokesperson for the Wayne, Pennsylvania-based CRO, which has a European base at Espoo, Finland, told Outsourcing Pharma that “the trend for outsourcing will continue to the benefit of quality service providers especially during difficult economic climates as clients continue to look for efficient/economical solutions to conduct their studies.”
Encorium's net revenues for the period fell 15.2 per cent to $7.1m (€5.3m), reflecting declines of $800,000 and $400,000 respectively in income from the firm's European and US operations.
Although the current economic climate is difficult for CROs, with several firms such as Parexel and PPD reporting a rise in cancellations, the likelihood of more US Food Drug Administration (FDA) post-marketing studies could provide a much needed boost for the sector.
In addition, the prospect of a follow-on biologic approval pathway, currently being debated in the US House of Representatives, could also benefit the CRO sector.
The firm explained that: "We see the possibility for Encorium's involvement and growth more in the phase I generic bio-availability and bio-equivalence arena as opposed to the post marketing arena where we have less experience and expertise."
Encorium's results are published just a week after the NASDAQ exchange cautioned the CRO for failing to file its 2008 accounts, with de-listing from the exchange a potential sanction.
A $12.5m charge relating to goodwill and certain intangible assets acquired along with the Finnish CRO Remedium Oy in November 2006 was included for Q4, for a $14.4 million charge over the whole year.
Since the end of 2008 new business awards fell back from $36.1 million to about $31 million on April 15, 2009. The latest $2m announcement goes some way to reversing this trend.
