Pierrel buys Encorium’s US operations for $2.7m

Pierrel will pay $80,000 in cash and take on $2.6m in debt under the acquisition agreement and has also taken over Encorium’s headquarters in Wayne Pennsylvania, freeing the US group of $3.4m in lease obligations and charges.

The Milan-based CRO is expected to offer jobs to the majority of Encorium’s staff, take on its existing customers and has agreed to pay a 10 per cent commission on any new clinical trial contracts singed by its new unit before the end of the year.

In addition, Encorium’s CEO, David Ginsberg, has joined the Italian firm to head up the new US division, which will operate as Pierrel Research USA.

Encorium has had a difficult 12 months with a marked drop in annual earnings due to contract cancellations forcing it to pull out of plans to buy oncology focused CRO Prologue Research International in September last year.

The following month, Encorium suffered another blow after a proposed merger with investment group Linkcon, which was intended to boost its presence in India, China and Latin America, also fell through.

The resulting drop in Encorium’s share price caused the firm to delay the publication of its annual results, raising further investor concerns.

And despite signing some new research contracts, Encorium’s financial woes have continued this year, as demonstrated by a gloomy set of results that saw revenues fall a further 15 percent.

All of which led, in May, to Encorium’s announcement that it was seeking a buyer for both its US operations and its Finnish subsidiary Encorium Oy. At present it is unclear if a buyer for the Finnish unit has been found.

In a press statement, Kai Lindevall, president of Encorium’s European and Asian operations, said that the sale was in “the best interest of our stockholders, employees and customers​.”

The deal follows just two months after Pierrel signed an agreement to buy fellow Italian pharmaceutical research services firm Farma Resa for €1.6m ($2.2m).