Drug Development

Who’s been dipping their fingers into the till at Parexel?

The big CRO Parexel believes that somebody on the payroll has been dipping into the company till. And the investigation has so roiled operations it can’t get its annual 10-K together in time – or so it informed investors through a filing with the SEC.

There’s not a lot of information available.

“On August 29, 2016, the due date for the 2016 Form 10-K, the Company received a report of an incident of misappropriation of corporate funds by an employee in one of the Company’s international operations,” Parexel alerted officials. It’s probably not a material amount, the CRO adds, but the company is reviewing the situation and needs more time to get to the 10-K.

Investors didn’t like the sounds of it and Parexel shares {PRXL} slid 4% by the close on Wednesday.

It probably didn’t help that the CFO, Ingo Bank, resigned in July. The Waltham, MA-based operation has also been restructuring, eliminating hundreds of jobs as it looks to reduce costs. At least a couple of hundred of those jobs involve ex-GSKers who were laid off from the Big Pharma’s operations in Research Triangle Park, NC, last year, transferred to the CRO and then promptly let go.

A group of law firms saw an opportunity in the midst of intrigue today, swooping in with lawsuits.

Parexel ranks as one of the top 10 CROs in the world, with more than 18,000 staffers. As we reported a few days ago, the big 10 are doing well after a shakeout divided the CRO business between a small set of big players which are doing well and hundreds of smaller CROs still scrambling for business.

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