Cetero preps for new owner after filing for bankruptcy protection
Despite filing for Chapter 11 bankruptcy protection Monday, the Cary, NC-based CRO Cetero insists it has no plans to cease daily operations or ongoing research. And if all goes as planned, Cetero will find itself under new ownership within the next 120 days.
"Throughout the reorganization process there will be no change to day‐to‐day operations at any of Cetero's facilities. Each and every one will continue to run and actively take on new studies," Cetero said in a statement to FierceCRO. "In addition, Cetero's employees will continue to focus their energy on providing clients with the company's proven clinical expertise and continue to uphold their commitment to the safety of all study participants, as well as the delivery of high‐quality and reliable data, and on‐time results."
Unable to provide exact details, April Johnson, the CRO's vice president of business relationship management, told FierceCRO that the 12 banks that are currently lenders to Cetero will put in a stalking horse bid to buy it. A stalking horse bid is used as a starting or minimally accepted offer that other interested bidders must surpass if they want to buy the company, as reported in Reuters. Once the banks make a bid, an auction of sorts will take place, allowing other groups to put in offers of their own.
The bid from the banks comes after another potential buyer came close to purchasing Cetero's facilities, only to back out of submitting a final bid last fall, according to the bankruptcy protection filing.
In spite of filing for bankruptcy protection, things have taken a turn for the better for Cetero within the past year, says Johnson. It has maintained a positive cash flow while picking up three new research projects so far this year. Even after a biting July report from the FDA alleging misconduct and falsified studies, Cetero has worked one-on-one with the government body to verify more than 1,300 previously unconfirmed reports - questionable results from the company's Houston lab, which drew the FDA's ire.
Contrary to the $1 million to $10 million figure Cetero cited for assets in the protection filing, the CRO's total assets are around $220 million, Johnson said. Its liabilities, however, are around $248 million.
- learn more from Reuters