AAIPharma shows first signs of life after bankruptcy

By Kirsty Barnes

- Last updated on GMT

Related tags: Bankruptcy

AAIPharma is showing the first signs of life after bankruptcy,
buying its first company after emerging from the ordeal - a
French-based clinical research organisation (CRO).

The road has been rocky for AAIPharma of late. The company filed for bankruptcy protection in 2005 after being plagued for a year by questions over accountancy fraud in relation to flattered product sales - investigations by the Justice Department and the Securities and Exchange Commission were launched and are still ongoing.

After narrowly escaping liquidation, the troubled firm undertook a reshuffle under Chapter 11 bankruptcy protection earlier this year and sold off its pharmaceutical products division to concentrate purely on clinical research. It is now hoping that the purchase of Cvitkovic & Associes Consultants (CAC) will set it on the road to recovery.

CAC has built its service model based on a therapeutic specificity - oncology - which AAIPharma saw as fitting in nicely with its existing contract research business and will allow it to create a new AAIOncology business unit.

The acquisition also brings AAIPharma new full-service capabilities in the early-stages of oncology drug development as well as in conducting large, global late-stage (Phase IIb/III) studies.

"In addition to expanding the company's therapeutic expertise, the capabilities of CAC complement the clinical services that AAIPharma currently provides its clients,"​ said Ludo Reynders, AAIPharma president and CEO.

"We will now utilise the new competencies and capabilities that CAC brings to accelerate and enhance the organic growth of our company."

Headquartered in Paris and with other offices Europe, the US and Latin America, CAC also allows AAIPharma to gain a foothold in Latin America as well as set it on the path to fulfilling its goal of expanding within Europe.

The company already has a strong presence in the US, as well as some parts of Europe, Germany in particluar, and has said it plans to assist these expansion plans both organically and inorganically via acquisitions such as this one.

"The acquisition of CAC constitutes a major step in building a drug development organisation that is focused on bringing innovative services to its customers worldwide,"​ said Ludo Reynders, AAIPharma president and CEO.

AAIPharma, which currently has 959 employees, said it will now add 100 employees and purchase new equipment as a result of the expansion.

On the other hand, CAC said it agreed to the deal after "reaching the limits of its organic growth."

"With AAIPharma, we can incorporate our oncology expertise and differentiation into a larger professional organisation that shares our vision,"​ said Professor Esteban Cvitkovic, CAC chairman and founder.

Financial terms of the deal, expected to close in the fourth quarter of this year, were not disclosed.

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