As a result of the new contracts Covalent has also managed to add three new customers to its books.
The clinical research organization (CRO) said the contracts are for consulting services and developmental support of new clinical trials and various changes-of-scope for existing studies.
Specific services will include protocol design and strategic consulting, clinical operations, and medical writing in the therapeutic areas of cardiovascular disease, infectious disease/vaccines, oncology, and diabetes.
The firm expects to begin receiving revenue for the contracts in the current second quarter on a proportional performance basis as services are performed on the specific project.
The cash injection is especially welcomed by the CRO, who in the first quarter of this year reported disappointing financial results, with net revenue of only $2m compared to $3.2m for the comparable 2005 quarter.
At the time Covalent attributed this decline to the level of clinical trial activities at the start of 2006 and delays in study start-up from several new contracts awarded late in 2005 and said it was pinning its hopes on a better second quarter performance, which it is now poised to receive.
"We now expect our second quarter 2006 net revenues to be in the range of $3m to $3.4m, reflecting our strong growth in backlog for the quarter ended March 31, 2006 as well as favourable trends in our new business contract signings and pipeline," said Kenneth Borow, president and CEO for Covalent Group.
"We expect to return to profitability with good visibility for sustained profitability for operations for the remainder of 2006."