PharmaKinetics Laboratories Inc., said yesterday that it plans to sell off its German subsidiary as part of a restructuring to help it emerge from Chapter 11 bankruptcy protection.
Under the terms of the sale, PharmaKinetics would receive $1.95 million in cash and $1.4 million in common shares of TSI Corp., a Worcester, Mass., company that will purchase the PharmaKinetics subsidiary, International Bio Research. TSI and International Bio Research both test drugs and cosmetics on animals before human trials.
The sale, which requires approval of the federal bankruptcy court in Baltimore, is also subject to several conditions, including an audit of the German company by TSI and the completion of a definitive agreement.
The sale will cut PharmaKinetics business by more than half, leaving it with 120 employees in its Baltimore laboratories, which primarily test generic drugs.
Taryn Kunkel, chief financial officer of PharmaKinetics, said the company hopes to emerge from Chapter 11 this summer, two years after it found itself mired in an industrywide generic drug scandal.
In 1990, it ended a contract with Bolar Pharmaceuticals, which accounted for about 45 percent of its revenues. Last year, Bolar pleaded guilty in U.S. District Court in Baltimore to selling adulterated and mislabeled generic drugs and was fined $10 million.
PharmaKinetics pleaded guilty last year to obstructing a federal investigation involving Bolar and was fined $200,000.