After Bankruptcy, PRACS Institute (Formerly known as Cetero Research) Lays Off Workers
PRACS Institute, the contract research organization that emerged from troubled Cary CRO Cetero Research, was closed this week less than a year after emerging from bankruptcy and this time it looks like the company has dosed its last patient. The CRO laid off all its workers and shut down operations at its Fargo, N.D. headquarters, Toronto and St. Louis, according to news reports in each of those three markets. So far, PRACS has not responded to media inquiries. PRACS ceased to have a North Carolina presence following a bankruptcy reorganization last year. The former Cary location served as the company’s headquarters and was not a clinical research site. The pieces of the company left after bankruptcy did business as PRACS, a return to the name and the home of one of the legacy companies that had formed Cetero. James Carlson, the man who co-founded PRACS in 1983, returned as CEO. Cetero’s troubles concerned allegedly falsified clinical trial documents and test results conducted at a Houston site over a five-year period. The Food and Drug Administration’s inquiry became public in the summer of 2011 when the agency warned that an undetermined number of tests – some for products already on the market – might need to be redone. CROs have long maintained that their outsourced services can do the work faster and cheaper than pharmas can. But even within that niche Cetero carved out a specialty, focusing on the earliest stages of clinical research. Cetero claimed it could get key decision-making data to pharmas much sooner in the drug development process, thus saving even more time and money. The contract research industry has shown resilience despite a challenging overall economy. Cash conscious pharmaceutical companies are looking for any way to slash their costs, leading them to outsource more and more work. Shares of publicly-traded CROs are on the rise and as the appetite for initial public offerings improves, Durham-based Quintiles – the largest of these pharmaceutical services providers – has filed to go public. Small and mid-sized CROs are merging or getting acquired by larger companies looking to add scale or expertise. It was that kind of M&A activity that formed Cetero.