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Top SFBC officials Quit Amid Senate Inaquiry Clinical Trials_ Bloomberg News |
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Tuesday, 03 January 2006 |
In its continuing coverage of corrupt clinical drug trial practices, Bloomberg News reports that all three founders of SFBC International, one of the largest clinical trial business operations that had failed to even screen human subjects for turberculosis, and threatened others with deportation if they refused to become guinea pigs, quit after the Senate Finance committee began investigating drug trial safety issues:
Lisa Krinsky resigned as president, and Arnold Hantman as its chief executive. On Dec. 19, Gerald Seifer, director of legal affairs quit.
" Krinsky, who the company refers to as a medical doctor, is a graduate of Spartan Medical School in St. Lucia and not a
licensed doctor. Krinsky and former director of legal affairs Gerald Seifer, who isn't a lawyer, share a $15 million home they
purchased last year. Seifer resigned Dec. 19 after an investigation found he engaged in ``inappropriate'' behavior with trial subjects, the
company said. Prior to his resignation, Seifer was placed on 30 days paid leave after a report from two law firms hired by
SFBC's board found that a witness heard Seifer threaten to have research subjects deported, the company said.
Hantman, referred to in company SEC filings as a CPA, is not licensed as a certified public accountant. Jack Levine, who
previously was lead director, was elected chairman of the board of directors, SFBC said. Hantman, Seifer and Krinsky were among SFBC's founders."
A team of investigative reporters at Bloomberg News provide a reality check on the seedy side of for-profit clinical trial companies that have been operating with impunity until Bloomberg's expose. Big Pharma's Shameful Secret (see: http://www.ahrp.org/infomail/05/11/03.php )
Contact: Vera Hassner Sharav
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BLOOMBERG NEWS
SFBC Loses Two Top Officials Amid U.S. Senate Inquiry
2006-01-03 08:50 (New York)
By Kerry Dooley Young and David Evans
Jan. 3 (Bloomberg) -- SFBC International Inc.'s two top officials quit just before they were to be interviewed by Senate
investigators probing the company's management of the largest private clinical trials center in North America. Jeffrey
McMullen was named chief executive officer.
Lisa Krinsky, 43, resigned as president and chairman and Arnold Hantman, 69, retired as chief executive, the Miami-based
company said today in a statement on Business Wire. Krinsky was to meet with Sen. Charles Grassley's staff Jan. 11 as part of
Grassley's inquiry into drug trial safety issues. No date was set for a meeting Grassley sought with Hantman.
Grassley, the Senate finance committee chairman, began his review after Bloomberg News reported in November on conflicts of
interest and lax oversight in the industry. The SBFC management changes come as it struggles to regain investor confidence after
Miami officials forced SFBC to remove half the beds in its main testing center because of safety issues, Canadian health
officials began probing a tuberculosis outbreak in a Montreal drug trial, and SFBC hired investment banking advisers to
``explore strategic alternatives.''
``We recognize the challenges facing SFBC's Miami facility, and we believe we have the management team and structure in
place to meet these challenges and reestablish SFBC's leadership position in the drug development services industry,'' McMullen
said in the statement.
SFBC shares fell 38 cents, or 2.3 percent, to $16.01 on Dec. 30 in Nasdaq Stock Market composite trading. SFBC shares
have lost 61 percent of their value since Nov. 1, the day before Bloomberg News reported that bioethicist said the company's
consent process inadequately warned drug trial participants of the risks of injury and death.
Krinsky Background
Krinsky, who the company refers to as a medical doctor, is a graduate of Spartan Medical School in St. Lucia and not a
licensed doctor. Krinsky and former director of legal affairs Gerald Seifer, who isn't a lawyer, share a $15 million home they
purchased last year.
Seifer resigned Dec. 19 after an investigation found he engaged in ``inappropriate'' behavior with trial subjects, the
company said. Prior to his resignation, Seifer was placed on 30 days paid leave after a report from two law firms hired by
SFBC's board found that a witness heard Seifer threaten to have research subjects deported, the company said.
Hantman, referred to in company SEC filings as a CPA, is not licensed as a certified public accountant. Jack Levine, who
previously was lead director, was elected chairman of the board of directors, SFBC said.
Hantman, Seifer and Krinsky were among SFBC's founders.
McMullen
McMullen, 43, is now president and CEO of SFBC's Pharmanet unit, a clinical trial company purchased in December. His
background includes time spent as a member of the senior management team at Corning Pharmaceutical Services, now Covance
Inc., another organizer of medical studies.
McMullen's 13 years at Covance include a range of operational, business development and sales and marketing roles,
the statement said. SFBC updated its earnings guidance to reflect the separation agreements with Krinsky and Hantman. The company will
take one-time, pretax charges of $3.83 million, or about 17 cents a share net of tax effect, in the fourth quarter of 2005.
SFBC's new guidance for 2005 is about $1.39 to $1.44 in GAAP earnings per share.
Grassley, an Iowa Republican, has also requested documents from U.S. regulators on inspections of SFBC. Last month,
Grassley said Inspector General Daniel Levinson should quickly compile a list of recommendations his office has made since 1995
and determine whether the appropriate federal agencies are heeding them.
Law Firms' Report
The company said last month that it had sent Grassley a copy of a report by two law firms SFBC hired to conduct an
independent review of allegations in the Bloomberg report. The resulting report from Winston & Strawn, based in Chicago, and
Tew Cardenas of Miami ``exonerated'' the company, SFBC said.
The review found that a witness heard Seifer, then SFBC's vice president of legal affairs, threaten to have research
subjects deported. Seifer, a 10-year employee, was placed on 30 days paid leave after the report, and the company said Dec. 19
that he resigned.
--With reporting by Michael Smith in Rio De Janiero. Editor: Gale (rtg)
To contact the reporters on this story:
Kerry Dooley Young in Washington (1) (202) 624-1936 or
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;
David Evans in Los Angeles (1) (323) 782-4241 or
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To contact the editor responsible for this story:
Robert Simison at (1) (202) 624-1812 or
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