Life sciences services firm Cetero Research has filed for bankruptcy while striking a deal with creditors for a restructuring.
Bloomberg News and Reuters reported the story Monday.
Cetero, which is privately held, is in trouble with the Food and Drug Administration.
Last July, the FDA sent a letter to Cetero, which is known as a contract research organization and conducts clinical trials, calling for changes in operations at a bioanalytical lab in Houston, Texas.
The agency also wanted to know drugs and drug sponsors reviewed by Citero’s Houston lab between April 2005 and June 2010, saying that data “may need to be repeated or confirmed.”
Cetero is based in Cary and is privately held. The amount of data requested by the FDA was reduced later.
The company has more than 1,400 employees and operates in seven locations. It has been involved in more than 20,000 clinical trials, according to the company website.
In addition to the lab in Houston, Cetero operates a bioanalytical lab in Toronto.
The FDA said in a statement at the time that it didn’t believe any patients are in danger.
Cetero had assets of about $205 million and debt of about $248 million as of Feb. 29, according to Chapter 11 papers filed today in U.S. Bankruptcy Court in Delaware, Bloomberg reported.
Bloomberg said the company had struck a deal to sell its assets to lenders “in exchange for secured debt and the assumption of liabilities.”
Chief Financial Officer Michael Murren outlined the deal in court papers.
Cetero also will secure a $15 million credit line to help pay for restructuring, Bloomberg said..
“The company faces ‘considerable costs’ from re-testing ordered by the U.S. Food and Drug Administration following an investigation into allegations that some data recorded by company chemists may have been inaccurate,” Bloomberg said, citing the bankruptcy documents.
A sale of assets will take place through an auction if the bidding procedures are approved, Bloomberg said.
(Bloomberg news contributed to this report.)
