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Major pharmaceutical distributor collapses into administration with 1,000 jobs lost

By Tom Keighley

One of the North East's largest companies has gone into administration with the immediate loss of 1,000 jobs.

Testerworld Ltd, part of the Converse Pharma Group, is a major supplier of medicines with turnover of around £300m. The company trades as DE Group and operates from offices in Great Park, Newcastle, and a facility in Prudhoe, Northumberland but it has ceased trading, along with a group of companies including Doncaster Pharmaceuticals, Crosspharma and Eclipse brands.

The business, which also has a Doncaster base, supplied more than 4,000 customers - including community pharmacies - across the country.

Read more: go here for more North East business news

Last year the Medicines and Healthcare products Regulatory Agency (MHRA) suspended Testerworld's operating licence due to "customer and supplier validation and control protocols" before the sanction was partially lifted the following month.

The firm mothballed its operation for around six weeks before restarting at about 95% of the pre-suspension trading.

Accounts for Testerworld to the end of March 2020 say: "Whilst the lifting of the partial suspension is not deemed a critical enabler to ensure a return to profitability of the business, it is essential that the business regains its full licence status.

"A roadmap towards achieving that objective has been submitted to the MHRA and the directors can confirm that progress is being made in line with agreed objectives and timelines included within the submission."

At the time, directors at Testerworld said they had extended a lending facility with the firm's bank, the Royal Bank of Scotland and Secure Trust, and that they expected the there was adequate resources to continue trading in the foreseeable future.

But administrators from Kroll were appointed to the business on Thursday, at which pointed it stopped trading immediately.

Philip Dakin, joint administrator, Kroll, said: “Pharmaceutical distributors and wholesalers form an important link between drug manufacturers and independent pharmacies and their end customers. It is a complex chain which means we will be working closely with the relevant regulators, the management team and the Group’s secured lenders to mitigate the impact on the pharmaceutical supply chain.

“On appointment our immediate objective will be to conduct an orderly wind down of the trading operations. The possibility of some small trade sales of parts of the business, has not been ruled out as we aim to maximise the return for creditors.”

The group was formed in 2013 following a management buy-out of its three component companies. It operated from 14 locations around the UK.

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Dive Deeper:
1,000 jobs lost as pharmaceutical firm Testerworld goes into administration
The firm had bases in Newcastle and Northumberland, as well as a major site in Yorkshire
HRT products could be sent to UK from mainland Europe next week
Regulator expected to consent to import of hormone replacement pills and patches from France
Why import restrictions aren’t enough to help Nigeria industrialise
Nigeria has a strong ambition to industrialise. It has relied heavily on the restriction of imports of certain goods targeted…
Texhong Eyes Vietnam in World of Diversifying Supply Chains
Key Takeaways: Texhong is preparing to launch a major facility in Vietnam that will sharply boost its fabric production to…
One subscription that gives you access to news from hundreds of sites
Energy Renaissance commits to locally sourced battery components
Tomago-based lithium battery technology manufacturer Energy Renaissance has appointed three Australian companies to provide key components for its superStorage family…
McColl's alcohol sales could be back on 'by close of business' on Thursday
Booze sales were stopped after Morrisons inked a deal to take over the ailing chain
Get all your news in one place