PhillyInc

There's been a boom, of sorts, for contract research firms that conduct drug trials on behalf of pharmaceutical companies. But it may be a deceptive boom for smaller CROs, many of them around Philadelphia. Encorium Group Inc. (Nasdaq:ENCO), a small successor to Covalent Group based in Wayne, told the SEC this week that a client, which it didn't name, had canceled a contact in January and backed out of payments of $12.8 million. That's a big deal for a company that expects to earn between $32 million and $34 million this year. But that's not all. It also told the SEC: "Over the past several years, we have observed that clients may be more willing to delay, cancel or reduce contracts more rapidly than in the past. If this trend continues, it could become more difficult for us to balance our resources with demands for our services and our financial results could be materially and adversely affected." Encorium had an accumulated deficit of $5.9 million at the end of last year. It also filed plans with the SEC to sell more than 2.6 million shares. - Jonathan Berr