What Happened To China Pharma Outsourcing Industry in 2008 - News Compile

JZMed, Inc.
China Pharma Outsourcing News Compile

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What Happened to China Pharma

Outsourcing Industry in 2008?
Selected News Compile
By JZMed, Inc.
February, 2009
JZMed, Inc.
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Page 1 of 55 JZMed, Inc. (www.jzmedi.com) 2/8/2009
JZMed, Inc. China Pharma Outsourcing News Compile
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Preface
In a short period of eight years, Chinese pharmaceutical outsourcing industry has been
growing in an average annual rate of 48%. China has now become the primary choice of
outsourcing destination for drug companies around the world. The industry is currently
composed of 250 professional service providers, 50 multinational service providers, 150
traditional Chinese pharmaceutical companies and 20 Chinese biotechnology companies
and has reached a market value of more than $1.4 B.
Only three years ago, Chinese pharma outsourcing industry was still under radar
detection. However, because of the emergence of a decent industry size and the reality of
its fast development, it is now receiving more and more attention from major
pharmaceutical markets. The numbers listed in the following table from JZMed’s news
collection could back this conclusion.
Table 1. News Coverage on China Pharma Outsourcing
Year Total numbers of piece of News coverage on

outsourcing news China outsourcing
Worldwide China Percentage
outsourcing outsourcing (%)
2006 88 5 6%
2007 138 20 14%
2008 281 81 29%
Source: JZMed Database.
To help professionals in all related industries gain a quick peek of what is going on in this
Chinese industry and recall what happened to it last year, we edited this News Compile.
All news related to China pharma outsourcing was reported in 2008 by various media
worldwide.
We hope this News Compile will assist professionals to better understand this Chinese
industry. Please contact JZMed, Inc. with any questions or inquiries.
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Table of Contents
Preface ------------------------------------------------------------------------------------------------2
News on Major Pharma Companies in China
Novartis has big plans in China --------------------------------------------------------------------6

Novartis Seeks to Accelerate Growth in China --------------------------------------------------6
GSK to double R&D staff in China ---------------------------------------------------------------7
GSK Signs Pre-JV Vaccine Pact with Shenzhen Neptunus Interlong ------------------------7
Sanofi-Aventis to Market Seasonal Flu Vaccine in China -------------------------------------7
Sanofi invests in Chinese clinical R&D capacity -----------------------------------------------7
Novo Nordisk made Major Investment in Its Tianjin Facility ---------------------------------8
Roche Announces Expansion in China -----------------------------------------------------------9
Lilly Adds New Target to Hutchinson Meditech Collaboration -----------------------------10
AZ to slash more European jobs and ramp-up China investment ---------------------------10
From Europe to China: AZ Restructures Packing Strategy ----------------------------------10
AstraZeneca announced proposed further investing in its Wuxi plant in China -----------11
Schering-Plough to Use HUYA Bioscience for Hunting Drug Candidates in China -----12
News on Investment Activities
Beijing Chemclin Biotech Co. received $16.5 million investment --------------------------15

China Launches “Mega Program” to Fund Drug Development -----------------------------15
Medtronic Buys 15% of Shandong Wiegao; Opens JV ---------------------------------------15
BMP Sunstone Acquires 50% Stake in Pediatric Drug Maker ------------------------------15
New VC Fund to Back Biopharmas in Jilin Province -----------------------------------------16
Joint Ventures
JV formed between MPI Research and Medicilon --------------------------------------------17

GSK Signs Pre-JV Vaccine Pact with Shenzhen Neptunus Interlong ----------------------19
Shinva and GE Healthcare Form Medical Device JV -----------------------------------------19
Alliances
European CRO joins first Chinese CRO alliance ----------------------------------------------20

Provid and Acesys Form US-China Medicinal Chemistry CRO Alliance -----------------21
Tigermed, OCT and LSK to set up global trials network -------------------------------------21
Acquisition
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WuXi PharmaTech makes its first acquisition -------------------------------------------------23

NeoStem buys its way into China ----------------------------------------------------------------24
Smiths Group Buys China Device Maker ------------------------------------------------------25
Frontage deal bolsters PRA’s lab services business -------------------------------------------25
News on Drug Discovery Service
J&J signed another contract deal with WuXi PharmaTech -----------------------------------27
News on Preclinical Research Service
China become a hot place for preclinical services ---------------------------------------------28

After searching all over the world, Bridge finally landed in China -------------------------29
Charles River accelerates China plans; reports profit jump ----------------------------------31
Immtech joins the China club --------------------------------------------------------------------32
WuXi broke planned deal with Covance -------------------------------------------------------33
Charles River opens preclinical centre in Shanghai -------------------------------------------34
Covance plans for preclinical in China ----------------------------------------------------------35
PharmaLegacy Opens facility in China ---------------------------------------------------------36
Pfizer now use WuXi PharmaTech for preclinical research ---------------------------------37
WuXi PharmaTech Shanghai Rodent Facility Awarded AAALAC Accreditation -------38
BioDuro Labs Accredited by AAALAC --------------------------------------------------------38
News on Clinical Research Service
Asian CROs poised for substantial growth -----------------------------------------------------39

China to benefit if India tightens clinical trial rules -------------------------------------------40
PPD initiates central lab services in China -----------------------------------------------------41
Omnicare broaches China's borders -------------------------------------------------------------43
Tigermed Builds Up Phase I CRO Services ----------------------------------------------------44
News on Contract Manufacturing Service
WuXi ends US biologics manufacture; focus on testing --------------------------------------45
News on Medical Devise/Instruments
Tecan Expands Operations In China And Asia Pacific ---------------------------------------47

Cook Medical to Open Asia Regional Center in Shanghai -----------------------------------48
Shinva and GE Healthcare Form Medical Device JV -----------------------------------------48
News on Biological Testing Service
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BioCurex to Offer Cancer Tests in Shanghai --------------------------------------------------49

ProGenTech to Develop Diagnostics with China’s CDC -------------------------------------49
News on Service of Outsourcing Service
Drug Information Association (DIA) Opens New Office In China -------------------------50
Chinese Companies Use Service Provided by Western Companies
QIAGEN and Shanghai Biochip Corp. Sign Collaboration Agreement --------------------52

Sartorius Stedim Biotech Signs Agreement With WuXi AppTec ---------------------------52
Pharmatech Associates Leads Design For First FDA-Licensed
Biomanufacturing Facility In China -------------------------------------------------------------53
Honeywell inks China packaging deal ----------------------------------------------------------54
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News on Major Pharma Companies in China
Novartis has big plans in China
May 06, 2008
Every major pharmaceutical company has a "China" strategy. Novartis is among the most
aggressive: it is currently the fourth biggest supplier of medications to hospitals in that
country and aims to make China one of its top 10 markets by 2010.
On April 2, Novartis’ China R&D center broke ground on its permanent headquarters in
Shanghai’s Zhangjiang Hi-Tech park. It currently has more than 2000 full-time
employees in China, and plans to make an initial investment of $96 million to build the
R&D center which focuses on treatments for diseases with a high prevalence in that
country. (Our 2006 take on the NITD and its ilk can be found here.). It was clear to
Novartis that China is going to be a tremendous market. It is convinced that it is one of
the most important emerging markets.
Novartis Seeks to Accelerate Growth in China
November 05, 2008
China business revenues of Novartis grew 24.8% last year, Jeffrey Li, President of
Novartis China, told the press on November 5. According to Li, the company hopes to
raise its annual business growth in the country to between 30% and 40% and will seek to
maintain this growth speed in the next five to ten years.
In order to facilitate the growth plan, Novartis will step up investments into its R&D
center in Shanghai and expand its marketing & sales force by 20% next year. Li said
Novartis is optimistic about the future of the Chinese pharmaceutical market, although it
is still unable to make a judgment over the potential impacts of the current global
economic downturn on this market. Li also stated that he is encouraged to see that the
country's ongoing healthcare reform seeks to provide broader healthcare coverage to
more population. Li revealed that Novartis will also seek to boost its OTC drug market
share in China and admitted that his company's growth in this area has not been
satisfactory. The existing OTC drug sales of Novartis has been concentrating on Voltaren,
but the company is in the process of registering more OTC drugs. However, new OTC
products are unlikely to be launched in the short term due to the long registration process
for OTC products (three to four years) in China. Li disclosed that Novartis is actively
looking for acquisition targets in China to accelerate its growth in the country, and the
priorities will be given to the opportunities in the OTC drug sector.
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GSK to double R&D staff in China
August 07, 2008
GlaxoSmithKline Plc plans to double its research and development staff to 350 in the
next few years. The company currently employs 170 R&D staff in China.
Carol Zhu, head of operation management and alliances in GSK's China R&D unit said
the drug maker plans to boost that to 200 by the end of 2008 and to 350 within another
year. Zhu added that staff levels would remain fixed for three or four years after the
increase.
The company will expand its facilities to accommodate further increases after that, she
said.
GSK Signs Pre-JV Vaccine Pact with Shenzhen Neptunus Interlong
November 21, 2008
GlaxoSmithKline and Shenzhen Neptunus Interlong Bio-Technique Co. Ltd. (NIBT), an

established vaccine manufacturer in China, will work together to develop flu vaccines for
the China market. The two companies have signed a formal Cooperation Agreement that
will lead to the formation of a JV company with $78 million of assets, if certain
undisclosed conditions are met.
Sanofi-Aventis to Market Seasonal Flu Vaccine in China
October 13, 2008
HONG KONG (Reuters) - French drug maker Sanofi-Aventis hopes to sell 25 million
doses of seasonal flu vaccine annually into China's largely untapped domestic market
once its plant in the southern city of Shenzhen goes onstream in 2012. Wayne Pisano,
head of the company's vaccines arm Sanofi-Pasteur, said on Monday only two percent of
Chinese were vaccinated against seasonal flu each year, a fraction of the coverage in
Europe and the United States.
Sanofi invests in Chinese clinical R&D capacity
October 23, 2008
French drug giant Sanofi-Aventis has set its sights on developing China as its Asian R&D
hub, unveiling plans for a significant expansion of its clinical research unit in Shanghai.
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The facility, which was established in 2005, has already been involved in several global
registration studies for a range of Sanofi products including Lantus, Plavix, rimonabant,
dronedarone and idrabiotaparinux.
The firm said that the planned expansion will allow it to keep pace with the growth of the
country’s drug sector and in particular with the increasing demand for local clinical trials
by the Chinese State Food and Drug Administration (SFDA).
Sanofi’s plans are designed to compliment the new biometrics centre it recently set up in
the Chinese capital Beijing. This new facility, which is due to be fully operational by the
end of the year, will provide the firm with study design data, management and statistical
analysis services.
The firm reiterated that, while the new centre will support global Phase I to IV studies,
ramping up the level of local registrational work and broadening the scope of clinical
operations in China would be among its top priorities.
Closer academic links
Drug discovery is another important aspect of Sanofi’s Chinese plans, as evidenced by its
new deal with the Shanghai Institutes for Biological Sciences (SIBS), which represents
eight of the country’s top scientific institutes.
The move is not Sanofi’s first deal with Chinese researchers. In 2007, it formed a
partnership with the Institute of Hematology and Blood Disease in Hospital in Tianjin
under which it is conducting a project to develop antibodies to acute myeloid leukaemia
(AML) and other cancers.
In addition to forging closer ties with Chinese academia, the partnership will see Sanofi
invest in a scholarship programme designed to support the development of the country’s
most promising young scientists in fields including structural chemistry, biology and
pharmacology.
SIBS’ vice president, Jia-Rui Wu, commented that: “This collaboration agreement brings
pharmaceutical R&D in China to another level, by allowing talented Chinese scientists to
become internationally recognised and ensuring that discoveries made in the area of basic
research are rapidly converted into applications for treating disease."
Novo Nordisk made Major Investment in Its Tianjin Facility
November 07, 2008
Novo Nordisk announced on November 7 that it is investing close to US$400 million in a

production facility in Tianjin, China. The company has earmarked the new insulin
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production plant in Tianjin as its primary production base in the Asia-Pacific region. It
represents one of the largest investments in the firm's history and is said to be creating up
to 500 new jobs.
"The new plant in Tianjin will become the world's most modern insulin formulation and
filling plant and is yet another example of the increasingly important role China is
playing in Novo Nordisk's global operations," stated president and chief executive officer
Lars Rebien Sorensen.
Ronald Frank Christie, president of Novo Nordisk China, suggested that the facility will
provide the company with a strengthened base for meeting the challenge posed by
diabetes in the Asian countries.
The decision indicates that many multinationals remain confident about China's medium-
term growth prospects even as signs are indicating that the economy is slowing much
more quickly than previously expected.
"For over a decade we have realised that the diabetes market in China would grow
quickly and nothing in the recent financial crisis has really changed that," said Lars
Rebien Sorensen, chief executive of Novo Nordisk.
China has continued to receive large volumes of foreign direct investment this year, in
spite of slowing growth in many economies around the world and the tight conditions in
credit markets.
Roche Announces Expansion in China
November 03, 2008
Roche announced today that it will establish an Asian Drug Collaboration Unit in China
and at the same time expand the company’s manufacturing facility in Shanghai in order
to streamline its global supply chain, step up export sales from China and prepare for the
company’s growth in China in the next decade.
Dr. Franz Humer, the company’s chairman, revealed at the inauguration ceremony in
Shanghai that the facility expansion project will include expansion and upgrading of its
existing administrative and manufacturing facilities, and construction of a number of new
facilities including a quality control building, a sample collection and testing center for
prescription drugs and high sensitized drugs, warehousing and cold storage facilities for
APIs and prescription drugs, and regenerative energy systems.
Humer stated that Asia, in particular China, has significant growth potential for the
emerging biotech sector and by establishing an Asian Drug Collaboration Unit in China,
Roche seeks to strengthen its collaboration with China, South Korea, Taiwan and
Singapore in new drug innovation.
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Roche currently cooperates with more than 80 international institutions including

Genentech and Chugai Pharma in drug R&D, and has collaborative agreements with
three well-known Chinese pharmacy colleges. Roche established its first joint venture in
China with a total investment of US$45 million in 1994 and currently markets 22
innovative drug products in the country.
Lilly Adds New Target to Hutchinson Meditech Collaboration
November 24, 2008
Hutchison China Meditech Ltd has expanded its drug discovery and development
partnership with Eli Lilly, adding another oncology target to the list. When the two
companies set up their partnership last year, the initial areas of concentration were
specified targets in oncology and inflammation.
AZ to slash more European jobs and ramp-up China investment
November, 24, 2008
AstraZeneca is to cut 1,400 jobs and close more manufacturing facilities by 2013, as it
attempts to slim down in preparation for impending generic competition for some of its
cornerstone drugs.
The move, which is in addition to the 7,600 jobs the firm will eliminate over the next two
years under its 2007 restructuring plan, will see it close facilities in Porrino, Spain,
Destelbergen, Belgium and Umeaa, Sweden.
Jobs at the company’s plants in Macclesfield in the UK and Sodertaije, Sweden will also
be affected although further details are not being released at present.
The news comes just days after the drugmaker won a case temporarily blocking a generic
version of its asthma drug Plumicort Respules made by Israeli firm Teva Pharmaceutical
Industries.
AstraZeneca, which has halted sales of a generic version of Plumicort that it sells with
Par Pharmaceuticals, said that the final outcome of the patent trial, due to begin again
tomorrow, is likely to impact on its earnings for the year.
Observers had mixed feelings about the patent battle. Natixis’ Philippe Lanone, told
Bloomberg that although AstraZeneca had reacted quickly there already may be some
damage from early shipments of Teva’s generic version of Plumicort. The UK firm’s
share price fell 1.7 per cent, or 42 pence, in trading on the London Stock Exchange.
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Regardless of the outcome of the Plumicort battle, AstraZeneca’s announcement of new
job cuts is a further indication of the difficulties being faced by big pharma in the
changing global market.
While planned cuts by other drug majors such as Pfizer, Merck & Co, Schering Plough,
Wyeth and GSK have been on the table for several years, the headlines in recent months
have been dominated by news of additional restructuring moves. Most recently Merck
CEO Richard Clark said that the company must lose a further 7,200 jobs to survive.
Astra looks East
AstraZeneca also fell in line with another trend sweeping big pharma, announcing plans
for further investment in its operations in South East Asia. The firm plans to increase its
investment in its manufacturing facility in Wuxi, China.
The additional funds, details of which have not yet been released, is designed to expand
the plants drug formulation capabilities and establish it as a packaging hub for its all of its
manufacturing facilities in the region.
Commenting on the plan, AstraZeneca executive vice president David Smith said that: “It
moves the supply process closer to the customer, responding to their requirements and
improving the security of the product wherever it is bought.”
From Europe to China: AZ Restructures Packing Strategy
November 26, 2008
AstraZeneca, last week, announced that it will eliminate packing sites in Spain, Belgium,
and Sweden augment it’s facility in China to keep up with growth in the Asia Pacific
markets. The move will cost AZ at least 1,400 positions by 2013.
The closing of the three European plants is part of a regional strategy designed to make
sure AZ is producing where the market is. Historically, the company has produced and
packed its merchandise in Europe and shipped to China as needed.
“We now have significantly more demand in China, and we are going to manufacture,
pack, and produce closer to where the customers are,” said Sarah Lindgreen, global
media relations specialist at AstraZeneca. “This gives AZ more customer insight and
reduces shipping costs.”
AZ will establish Macclesfield, Cheshire, UK, as its regional packing center for the
European market, transferring packing that is now done at the smaller sites to a central
location. There will be a net reduction in headcount at Maccelsfield of about 250 people.
Some employees will be taking on new roles, and some of the formulation work that was
being done in Europe for the Chinese market will be moved to China.
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“With the increasing wealth of the Chinese population, a shift in the demographics, and a
greater awareness of healthcare opportunities, the Chinese are pushing for a range of drug
products, including mature drugs that are no longer as popular in the states or Europe,”
Lindgreen told Pharm Exec on Tuesday. “They want the drugs that were new 10 years
ago. They’ve never had access to these medications, and we are seeing significant
growth.”
She noted that there will be upgrades at the China plant during the next five years, but at
this time AZ hasn’t indicated whether improvements will be in headcount or capitol
investments.
“These moves are a continuation of AstraZeneca’s program to improve the organization’s

productivity and efficiency,” stated David Smith, executive vice president of operations,
AstraZeneca. “It moves the supply process closer to the customer, responding to their
requirements and improving the security of the product wherever it is bought.”
In other news, AstraZeneca was awarded a temporary restraining order against Teva
Pharmaceuticals to stop the generics firm from marketing its version of AZ’s asthma drug
Pulmicort. As an addendum, AZ will have to stop selling its own generic version of the
drug that it developed with Par Pharmaceuticals.
AstraZeneca announced proposed further investing in its Wuxi plant in China
November 20, 2008
AstraZeneca announced proposed changes to its global manufacturing and supply chain
operations as part of its plans to improve efficiency. The company introduced new
manufacturing processes, and it will also establish a regional packing strategy to improve
its ability to respond to customer requirements. AstraZeneca will exit three sites: Porriño
in Spain, Destelbergen in Belgium, and Umeå in Sweden. The company also announced
that roles will be affected at its facilities in Macclesfield, UK, and Södertälje, Sweden.
These moves will result in a net reduction across the business of 1400 positions by 2013,
subject to local consultation. AstraZeneca is further investing in its Wuxi plant in China.
Part of this investment will provide additional packing and formulation capabilities.
Schering-Plough to Use HUYA Bioscience for Hunting Drug Candidates in China
December 18, 2008
HUYA Bioscience International, a leader in US/China pharmaceutical co-development,

recently announced an agreement with Schering-Plough Corporation's subsidiary, N.V.
Organon. Schering-Plough has selected HUYA to identify and present to Schering-
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Plough on an exclusive basis proprietary lead, preclinical and clinical drug candidates in
specific therapeutic areas that originate in China.
"HUYA is quickly gaining a reputation as a key point of contact for members of the
Chinese bioscience community looking to establish relationships with Western
development partners," said Mirielle Gingras, PhD, President and CEO of HUYA. "Our
agreement with Schering-Plough demonstrates both the effectiveness of our network in
China, and our ability to leverage that network to benefit major development partners in
the West. We are delighted to be forging this new alliance, and look forward to a fruitful
collaboration."
Schering-Plough will gain access to HUYA's growing Chinese bioscience network

comprising premier universities, government research institutions and bioparks
throughout the country. HUYA already has agreements in place with several of these
organizations whereby HUYA has ongoing exclusive access to compounds and biologics
in a variety of indications. The company is currently evaluating and following the
progress of more than 500 drug development candidates.
HUYA's model is based on longevity of relationships with its Chinese partners to provide
a continuous source of compounds rather than a one-time single compound strategy. The
ongoing exchange of expertise and data is intended to lower risk and facilitate rapid and
efficient clinical development in both China and the West.
HUYA currently has two Chinese drugs undergoing preclinical development in the US -
HBI-3000 and HBI-8000. Both drugs, for cardiac fibrillation and oncology, respectively,
have successfully passed US FDA pre-IND consultations.
HUYA's Innovative Co-Development Model
HUYA was one of the first companies to recognize China's potential to help meet the
global need for pre-clinical and clinical stage compounds for the drug development
process. Leveraging the HUYA Integrated Co-development Model for partnering with
Chinese research institutions and pharmaceutical companies, HUYA identifies and
licenses highly promising pre-clinical and clinical stage compounds in China. HUYA's
Chinese partners retain development and marketing rights in China with the expectation
that both parties will benefit from the research and development collaboration.
One of the key differentiators of HUYA's approach HUYA is the assembly of a high-
level team of scientific and clinical advisors for each new compound. The team
collaborates with its' Chinese partners to discuss and design clinical trials as the
compounds enter the U.S. development process, speeding the process and mitigating risk.
HUYA's global team of advisors includes Benedict Lucchesi, MD, PhD, Peter R. Kowey,
MD, Dennis Roy, MD, Jefferson L. Anderson, MD, Eric J. Topol, MD, Stanley Nattel,
MD, Anthony Tolcher, MD, Alex Adjei, MD, PhD, Patricia LoRusso, DO and Michael
Robertson, MD.
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"From my involvement with the cardiac fibrillation program, I have been impressed with
the relationship that HUYA has forged with its Chinese partners," said Eric Topol, MD,
Chief Academic Officer, Scripps Health, San Diego, CA. "HUYA's co-development
model is an excellent system for developing new drugs and ultimately introducing them
into the Western market."
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News on Investment Activities
Beijing Chemclin Biotech Co. received $16.5 million investment
Oct 23, 2008
Beijing Chemclin Biotech Co. completed a $16.5 million Series B round that it will use
to further its diagnostics reagents business. The financing was led by a new investor,
China Healthcare Partnership (managed by MC China), and it included existing investors,
WI Harper, Siemens Venture Capital, and SB China Venture Capital. The investment
bank China eCapital advised Chemclin in the transaction. Formed in 1999, Chemclin
markets radioimmunoassay (RIA) kits, ELISA and chemiluminescent (CLIA) reagents.
China Launches “Mega Program” to Fund Drug Development
November 9, 2008
China has instituted a mammoth new drug development program that could be worth up
to $10 billion, with the goal of stimulating a first-rank, innovative drug development
industry in China. The “Mega New Drug Development Program” is the first government
funding program to focus solely on new drug development. Funding will be spread over a
total of thirteen years with the initial 6.6 billion RMB (nearly $1 billion) going to projects
that are begun from now through 2010.
Medtronic Buys 15% of Shandong Wiegao; Opens JV
December 24, 2008
Medtronic, Inc. has completed its equity investment in fellow medical device maker
Shandong Wiegao Group Medical Polymer Company Limited. The company paid HK
$1.7 billion (US $221 million) for a 15% interest in Wiegao. Following the investment,
Medtronic and Wiegao have established a joint venture (controlled 51/49 by Medtronic),
which will market Medtronic's spinal devices and Wiegao's orthopedic products in China.
BMP Sunstone Acquires 50% Stake in Pediatric Drug Maker
December 23, 2008
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BMP Sunstone Corporation will pay 20 million RMB ($3 million) to acquire 50% of
Zhangjiakou Shengda Pharmaceutical Co., Ltd. from Beijing Penn Pharmaceutical Sci-
Tech Development Co., Ltd. Eventually, BMP Sunstone intends to acquire a majority
stake in Shengda. Like BMP Sunstone, Shengda focuses on the pediatric market with a
special interest in antibiotics. It has SFDA approval to manufacture 76 drugs.
New VC Fund to Back Biopharmas in Jilin Province
December 22, 2008
Power Capital Co., Ltd. and a fund of funds in Jilin Province, Northeast China have
established a 200 million RMB ($30 million) venture capital fund that will invest in
pharmaceutical companies in Jilin. Power Capital also plans to set up a parallel fund for
M&A and reorganization of the province's pharmaceutical resources.
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Joint Ventures
JV formed between MPI Research and Medicilon
January 02, 2008
US-based MPI Research and China's Shanghai Medicilon have formed a joint venture in
preclinical services, as they position themselves to cash in on what is a budding market
sector in China.
Coined Medicilon-MPI Preclinical Research, the new venture will be based at the
Zhangjiang Hi-Tech Park in Shanghai until later this year, when operations will be
transferred to a new 50,000 sq. ft preclinical testing facility in the Chuansha Economic
Park.
Together, the two firms said they will establish a facility, expected to be fully operational
by 2009, that provides both good laboratory practice (GLP) and non-GLP preclinical
services including investigatory new drug (IND) enabling studies and assistance with
IND submissions and new drug applications (NDAs) for the US and other regulated
markets.
MPI Research is one of several firms trying to forge a path for themselves in the growing
preclinical contract services arena, which is dominated by Charles River laboratories and
Covance.
Among its clients it counts US biotech firms such as Advanced Cell Technology, whom
this year it contracted with to undertake an extensive preclinical program, including pilot
studies for its retinal pigmented epithelial (RPE) program designed to find new
treatments for degenerative retinal disorders.
However, as biopharma companies continue to migrate towards sourcing preclinical

services in China, MPI Research has had its eye on a slice of the pie and has been looking
for three years for the right firm with which to form a partnership in the country.
There appears to be plenty of opportunity at present for firms who establish themselves in
the early-phase arena to grow extensively - China is fast becoming one of the best
destinations to outsource preclinical work, which is often highly specialised and difficult
to perform.
According to a recent Bloomberg report, China's largest preclinical services provider,

WuXi Pharmatech, will this year overtake Pfizer, the world's largest pharmaceutical
company, in the number of chemists it employs.
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The contract research organisation (CRO) went public four months ago and since then it
has doubled in value.
Meanwhile, in November, China's second largest CRO ShangPharma attracted $30m

from US private investment firm TPG and is planning a growth assault to try and gain
some ground on its larger domestic rival.
Moreover, the country's emergence as a favourite destination for outsourcing drug

development has been reflected in a flurry of activity in this field of late involving several
large pharma firms including AstraZeneca, Merck & Co, Pfizer, Novartis and Eli Lilly.
"The Chinese scientific community has identified this as a niche area and the government
has been working to provide an environment where these studies can be conducted to the
satisfaction of global sponsors and regulatory bodies so that the country can become a
leader in the field', DA Prasanna, vice chairman & managing director of Manipal
Acunova recently told Outsourcing-Pharma.com.
The speed of studies conducted in China has also contributed to the country's appeal, as is
the low cost base the country is able to offer to those partaking in the high risk world of
drug discovery. According to a recent report published by the UK Trade and Investment
(UKTI) department, the local Chinese industry estimates that Phase I trials can be
conducted in China for around 15 per cent of the equivalent cost in a Western country,
while Phase II studies cost 20 per cent of the price in the west. China also has a large and
untapped domestic market which further adds to its attraction.
Even so, a recent survey reveals that Western pharma companies are still largely shying
away from outsourcing preclinical work to Asia.
Lehman Brothers carried out the survey, and only 32 per cent of those interviewed said
their companies were planning to outsource preclinical studies to Asia, and even then,
nobody said they planned to do this "immediately".
For those planning to shy away from Asia for the indefinite future, the biggest hurdles
cited in the survey were distance, intellectual property risks, and lack of quality control in
how studies are carried out.
"While most respondents did not plan on outsourcing preclinical studies to Asia, there
was interest, although it still remains off the horizon", said Lehman Brothers Equity
Research analysts Douglas Tsao and Lawrence Marsh.
For the majority of companies, it appears to be more of a long-term plan, with 30 per cent
stating they would wait five years or longer; 26 per cent said 4 years; 20 per cent
indicated they would wait 3 years; while only 14 per cent intended to do so in 2 years;
and 11 per cent within the next 12 months.
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"Almost half indicated they expected to begin outsourcing studies to Asia within the next
three years", said the analysts.
"Interestingly, we suspect this roughly matches the timeline that the major US preclinical
services providers are expected to begin offering [good laboratory practice] GLP-
compliant testing services in China".
GSK Signs Pre-JV Vaccine Pact with Shenzhen Neptunus Interlong
November 21, 2008
GlaxoSmithKline and Shenzhen Neptunus Interlong Bio-Technique Co. Ltd. (NIBT), an

established vaccine manufacturer in China, will work together to develop flu vaccines for
the China market. The two companies have signed a formal Cooperation Agreement that
will lead to the formation of a JV company with $78 million of assets, if certain
undisclosed conditions are met.
Shinva and GE Healthcare Form Medical Device JV
December 29, 2008
Shinva Medical Instrument and GE Healthcare will form a medical device JV, called
Xinhua GE Medical Systems, with a total investment of $25 million. The new company
will focus on diagnostic X-ray equipment and be involved in R&D, manufacturing and
sales. It will also develop additional equipment and software. Under the agreement,
Shinva will hold a 51% stake of the new company, and GE will hold the remaining 49%.
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Alliances
European CRO joins first Chinese CRO alliance
February 21, 2008
Europe's Novasecta has formed an alliance with Chinese contract research organisations
(CROs) Sundia Meditech and HD BioSciences to provide their R&D services to
European mid-sized biopharma firms.
To date, the rapidly-growing trend of outsourcing drug discovery work to CROs in China
has been largely driven by the large global pharma firms.
In Europe, NovaSecta is a specialist R&D service provider for smaller to mid-sized
Businesses and the firm said it is now time for European pharmaceutical and biotech
companies "to make use of the scientific skills, creative talent pool, flexible resourcing
and cost-effectiveness that many global big pharmas already take for granted in China".
"This alliance is therefore a natural step in Novasecta's evolution as an R&D services

company".
Its two new partners, Sundia Meditech and HD BioSciences have already been working
together in China since May 2007, when they formed the country's first CRO alliance so
that they could expand their range of services to better serve clients worldwide, while still
minimising cost.
Robert Thong and John Rountree, NovaSecta's co- founders and managing directors, said
that they selected these two Chinese firms to work with in particular, "based on their
professionalism and track record in repeatedly delivering drug discovery solutions to
their US and multinational clients".
With the Chinese CRO market continuing to develop as it has been, we can expect to see
more and more of these types of domestic and western alliances formed in the country,
with the aim offering international clients better access to quicker and cheaper preclinical
services from within China.
Only last month, US-based MPI Research and China's Shanghai Medicilon formed a joint
venture to provide preclinical services in China.
Together, the two firms said they will establish a facility, expected to be fully operational
by 2009, that provides both good laboratory practice (GLP) and non-GLP preclinical
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services including investigatory new drug (IND) enabling studies and assistance with
IND submissions and new drug applications (NDAs) for the US and other regulated
markets.
The country's emergence as a favourite destination for outsourcing drug development has
been reflected in a flurry of activity in this field of late involving several large pharma
firms including AstraZeneca, Merck & Co, Pfizer, Novartis and Eli Lilly, who have also
established bases there.
"The Chinese scientific community has identified this as a niche area and the government
has been working to provide an environment where these studies can be conducted to the
satisfaction of global sponsors and regulatory bodies so that the country can become a
leader in the field', DA Prasanna, vice chairman & managing director of Manipal
Acunova recently told Outsourcing-Pharma.com.
The speed of studies conducted in China has also contributed to the country's appeal, as is
the low cost base the country is able to offer to those partaking in the high risk world of
drug discovery.
The new alliances now being forged between western and Chinese firms are opening the
door for the western firms who do not have the scale and resources that the big pharma
firms do, to now also start taking advantage of what China has to offer.
Provid and Acesys Form US-China Medicinal Chemistry CRO Alliance
Sep 8, 2008
Provid Pharmaceuticals of New Jersey and Acesys Pharmatech of China have formed a
US-China CRO alliance. The new group puts together Provid’s US-based drug discovery
expertise and project management capabilities with Acesys’s China-based medicinal
chemistry resources and favorable cost structure. According to the announcement, the
alliance will offer all aspects of medicinal chemistry for pharmaceutical and biotech
clients.
Tigermed, OCT and LSK to set up global trials network
November 22, 2008
Chinese CRO Tigermed Consulting has teamed up with Russian and South Korean
counterparts OCT and LSK to establish a global clinical trials network and expand its
geographic footprint.
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Saint Petersburg-headquartered OCT, conducts clinical studies in Russia, Ukraine and
other Eastern European countries while Seoul-based LSK carries out equivalent work in
Korea, Japan, Taiwan and Malaysia.
Tigermed, one of the largest contract research organisations (CRO) in China, hopes that
the strategic alliance will help it expand its capacity and territorial client base and provide
a network from which it can further its penetration into the lucrative European and US
trials markets.
Company vice president Cao Xiachun said that: "By forming these strategic alliances,
Tigermed takes the pioneering position in exploring business potential and achieving
breakthroughs in global service capabilities through cross-border cooperation, which is a
significant move for China's CROs.”
She explained that: “Strategic collaboration is one of our important tactics to expand
global business, and this type of partnering becomes an essential part of our international
strategy."
Chinese trial firms set to dominate sector?
Clinical development has long been a strength of the Chinese outsourcing sector, in
contrast with India where manufacturing dominates. This situation may polarise further if,
as is expected, India places further restrictions on research after a recent series of high
profile problems with studies conducted in the country.
Earlier this month a report by the Campaign for Fighting Diseases, part of the UK-based
International Policy Network, raised this point by suggesting that removing support for
India’s emerging clinical trials industry would be a mistake.
"Although it is not clear if the clinical trials were culpable, should the inquiry suggest
new regulations, the real winner will be the Chinese economy rather than Indian
patients," commented the report's authors, Philip Stevens and Julian Harris.
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Acquisition
WuXi PharmaTech makes its first acquisition
January 07, 2008
WuXi PharmaTech, China's contract research titan, has orchestrated its first acquisition,
gaining biologics capabilities and a base in the US.
The firm has agreed to pay $151m for US-based AppTec Laboratory Services in addition
to taking on $11.7m of AppTec's debt. The transaction already has the approval of all
required parties and is expected to close in the first quarter of 2008.
AppTec offers contract testing, research and development, and biologics manufacturing
services from FDA-registered facilities in Philadelphia and Atlanta and WuXi
PharmaTech said its chemistry services will be complemented by AppTec's biologics
testing and manufacturing capabilities to create a "broader and deeper scope of services".
In addition, the firm said that AppTec brings "established customer relationships with
many leading pharmaceutical, biotech and medical device companies in the US and
around the world".
Dr Ge Li, WuXi PharmaTech chairman and CEO, said the purchase was a step towards
its goal of becoming a "global R&D outsourcing leader". A company spokesperson
indicated that further acquisitions may be on the cards in the near future.
To date, WuXi PharmaTech has only employed a strategy of organic growth, however,
after going public four months ago it has doubled in value and is now in a position to
begin spreading its tentacles beyond China's borders.
With its global expansion plans it may also be planning to take on the US-based contract
research organisations (CROs) who are setting up operations and/or establishing business
partnerships in China and in doing so, encroaching on its market share.
China has been actively trying to create a name for itself in the preclinical arena and is
fast becoming a popular destination to outsource preclinical work, which is often highly
specialised, difficult to perform and costly.
According to a recent Bloomberg report, WuXi Pharmatech, China's largest preclinical

services provider, will this year overtake Pfizer, the world's largest pharmaceutical
company, in the number of chemists it employs - currently the number sits at 2100.
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The annual cost of a Chinese scientist is around $30,000 a year - a saving of up to nine-
tenths on hiring a US scientist, according to a report by Jinsong Du, a health-care analyst
with Credit Suisse in Hong Kong.
NeoStem buys its way into China
November 04, 2008
NeoStem has agreed to acquire China Biopharmaceuticals Holdings in an attempt to

capitalise on the manufacturing and marketing opportunities in the nation.
The deal will see NeoStem take a 51 per cent controlling interest in Suzhou Erye
Pharmaceutical, a subsidiary of China Biopharmaceuticals, which produces over 100
drugs on seven good manufacturing practice (GMP) compliant lines.
NeoStem’s business is currently focused on the collection, research and development of

stem cells, with the acquisition marking its first venture into small molecules.
Robin Smith, CEO of NeoStem, said: "We are excited about our collaboration with
Suzhou Erye Pharmaceutical Co Ltd as it will open new markets, distribution channels
and capabilities for production of stem cell related products in the world's fastest growing
economy."
Eyre is currently undergoing a three-year expansion plan, which is intended to add

additional manufacturing capacity and enhance revenues and profits.
Madame Jiang, general manager at Eyre, said that the deal with NeoStem would enhance
the company’s pipeline and give it access to new technologies. The deal is expected to be
closed in the first calendar quarter of 2009.
NeoStem aims at Asia
In a further attempt to gain a foothold in the Asian market, NeoStem has agreed to
acquire Beijing HuaMeiTai Bio-technology and its holding company.
NeoStem is particularly keen to capitalise on the contracts HuaMeiTai has with the
Shandong New Medicine Research Institute of Integrated Traditional and Western
Medicine.
Shandong is a provider of regenerative medical therapies in China, with NeoStem

believing it can use this distribution channel to get its products to market in the nation.
In addition NeoStem and Shandong are looking to collaborate on new technologies, in
particular very small embryonic-like stem cells (VSELs). NeoStem has a worldwide
exclusive license for the identification and isolation of VSELs.
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Smiths Group Buys China Device Maker
November 28, 2008
Smiths Group of London (LSE: SMIN), an engineering conglomerate that includes

Smiths Medical, a medical device division, has acquired Zhejiang Zheda Medical
Instrument (ZDMI). Based in Hangzhou, ZDMI makes syringe pumps and enteral
feeding devices primarily for the Chinese market. Last year, ZDMI reported sales of 73
million RMB ($10.7 million). The purchase price was not disclosed.
Frontage deal bolsters PRA’s lab services business
December, 8, 2008
Contract research organisation PRA International has signed an agreement with fellow
US firm Frontage Laboratories to expand the range of laboratory services it can offer to
its clients.
The CRO has joined a number of its peers in broadening the portfolio of services offered
in order to provide a comprehensive suite that can attract large drugmakers wishing to
find a ‘one-stop-shop’ for trials. It already operates a comparable full-service offering in
Europe and is bringing its North American operations into line.
PRA said the deal would allow its US Clinical Pharmacology Center, part of the PRA
Early Development Services business, to offer “a full complement of analytical lab
testing services to its existing Phase I - IV clinical trial services in North America.”
In the bioanalytical area, Frontage specialises in method development and validation,

biological sample testing, synthesis and characterisation of reference standards and
metabolites, as well as pharmacokinetic testing and bioequivalence studies. The company
operates a bioanalytical and biomarker research centre in Malvern, near Philadelphia, that
houses 17 mass spectrometers and other instrumentation.
The company’s CEO, Song Li, said that the firm can now will offer specialised
bioanalytical services through PRA’s customer network.
The aim is to build “a collaborative relationship with PRA that not only streamlines
project execution but also places a strong emphasis on project management," he said.
PRA said Frontage’s services will complement the activities of PRA’s 80-bed Lenexa
clinical facility near Kansas City, Missouri, which runs a multitude of Phase I and Phase
IIa studies each year, with a particular focus on first in human studies and other complex
pharmacokinetic studies.
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The new collaboration also offers pharmacokinetic and biostatistical consultancy and data
support (including data management, biostatistical and PK/PD analysis and ICH-
compliant report writing).
The firm said it “now offers pharma and biotech sponsors and other CROs the ability to
align the clinical and laboratory processes, thus saving time by avoiding unnecessary
clinical trial delays.”
Bigger in Germany
Meanwhile, PRA has also added another office in Munich, Germany, as it continues to
tap into the European contract research market. This is PRA’s third office in Germany, a
country which was home to the first European branch of PRA, established in Mannheim
27 years ago.
Earlier this year the company relocated some of its German operations into a facility in
Berlin that at the time tripled the size of the previous site, on the back of what it
described at the time as “exceptionally fast” growth in its European Phase I trials
business.
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News on Drug Discovery Service
J&J signed another contract deal with WuXi PharmaTech
October 20, 2008
Johnson & Johnson has tapped Chinese WuXi PharmaTech for additional R&D services,
following the trend towards high-level, strategic collaborations between drugmakers and
contract research organisations.
Under the terms of the new agreement WuXi Pharmatech will provides Janssen
Pharmaceutica, part of J&J’s Pharmaceutical Research & Development division, with
integrated research services in the area of discovery chemistry, discovery biology,
chemical and analytical development services, formulation, and preclinical and bio-
analytical services.
Previously, WuXi was supplying only discovery chemistry services to J&J, so the
expanded agreement represents a significant hike in the scale of their collaboration, and
reaffirms the value that the larger CROs can accrue by developing a broad, integrated
service portfolio. The terms for the new contract and indeed the previous one have not
been disclosed.
Recent weeks have seen other examples of wide-ranging collaborations between CROs
and drugmakers, in keeping with the shift from tactical to strategic outsourcing.
Perhaps the most notable is Covance’s $1.6bn agreement with Eli Lilly, which also
signed major deals with Quintiles and 3i at the same time as part of a major shift into
outsourcing. Others include Novartis’ long-term relationship with Lonza for development
and manufacture of biopharmaceutical candidates.
Dr. Ge Li, chairman and CEO of WuXi PharmaTech, said, "”Our partnership
demonstrates the strength of our innovation driven and fully integrated R&D service
platform."
The expansion of the deal comes after a rocky patch for WuXi. A collaboration with
Covance that would have seen the companies partner on preclinical services collapsed
earlier this month. Meanwhile, WuXi recently downgraded its earnings projections for
2008 after saying that it had experienced delays or cancellations in contracts from small
biotech companies.
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News on Preclinical Research Service
China become a hot place for preclinical services
May 07, 2008
China's preclinical services providers are beginning to carve a niche for themselves on
the global stage, buoyed by the growth of the domestic market.
China's pharmaceutical industry, which holds vast potential but remains largely untapped,
is finally waking up, growing 30 per cent a year between 2000 and 2005 to reach $3bn,
compared with a 19 per cent annual growth rate for the pharmaceutical industry as a
whole.
According to a recent article in Nature Biotechnology, titled: "Chinese health biotech and
the billion-patient market", as the domestic market continues to evolve, several Chinese
companies that were founded with a pure research and development (R&D) business plan
have recognised that to stay afloat they needed to adopt a new plan, one that would offset
risks and costs and increase in-house capabilities.
Hence the country's preclinical outsourcing industry was born. Many of these companies
are now relying on contract services to generate revenues and remain competitive.
The services they now offer range from early-stage research and preclinical development,
to the clinical services and manufacturing aspect of the business also.
WuXi PharmaTech, ShangPharma, Shenzhen Chipscreen Biosciences, HD Biosciences,

CapitalBio, Fudan-Yueda Bio-Tech and SinoGenoMax are among the dominant contract
research organisations (CROs) that have sprung up over the years.
As firms such as these have gained experience they are now drawing interest form
international firms who are eyeing China's cost-efficiency of developing drugs compared
with the west, resulting from the low-cost scientific talent, clinical trials and raw
materials available in the country (with a lowest estimate of 10 per cent of the cost of
similar expertise in the US).
Now these Chinese services firms are beginning to take their businesses a step further -
having gained the world's attention, they are recognising that their experiences with
domestic regulatory agencies and markets are valuable to international clients, and they
are using this knowledge in their business plans, according to the Nature article.
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Assistance in drug registration with Chinese regulatory agencies, such as those offered by
Shanghai Genomics; and market consultation and clinical evaluations according to
Chinese State Food and Drug Administration (SFDA) requirements as offered by Beijing
Wantai are examples of expanding realms of service.
China's largest preclinical services provider, WuXi PharmaTech, is at the forefront of this
movement, being one of the first Chinese companies to market itself internationally as a
pure service company.
With over 1,000 employees, it is one of the country's largest biotech firms and provides
services to support new drug discovery and the chemical development of new drug
candidates.
The company is in the midst of expanding its capabilities into preclinical toxicity, animal
studies, bioassays and plant formulations, with the aim of becoming a fully integrated
services company.
According to the Nature article, WuXi PharmaTech's chairman and CEO, Ge Li, credits
the company's success to an innovative approach both to operations and project
management and to diligent protection of its clients' intellectual property (IP). Ensuring
protection of clients' IP "is the lifeblood for a company like ours", he said.
Meanwhile, international partnerships for innovation are also on the rise in China, with
foreign biotechs increasingly forging new alliances with Chinese services firms.
In January this year, US-based MPI Research and China's Shanghai Medicilon formed a
preclinical services joint venture in China and in February, Europe's Novasecta formed an
alliance with Chinese CROs Sundia Meditech and HD BioSciences to provide their R&D
services to European mid-sized biopharma firms.
Alongside this, the Chinese government is strongly encouraging foreign companies to

develop their products in the country.
In addition, investment in Chinese CROs by foreign firms is also on the rise, as witnessed
by an increasing incidence of such deals over the past couple of years.
For example, in January, China's NovaMed Pharmaceuticals secured $13.8m in Series B

Funding from international investment firms Fidelity Asia Ventures and Fidelity
Biosciences, and in November 2007, China's second largest CRO ShangPharma attracted
$30m from US private investment firm TPG.
After searching all over the world, Bridge eventually landed in China
January 22, 2008
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Bridge Laboratories will bolster its China operations again after scoring itself a further
$18m worth of venture capital funding.
The money will be put towards expanding its toxicology lab in Beijing, in addition to
further growing its US operations, which consists of a headquarters in California and a
facility in Maryland.
In a statement, the company said that the funding will also provide it with the flexibility
to consider acquisitions that would enhance its facilities or capabilities.
Bridge was asked by Outsourcing-pharma.com to elaborate on the nature of its latest

expansion plans but failed to do so.
The firm's strategy involves delivering preclinical services in China at "significant

savings", while providing a US-based service for clients that prefer this option.
As such, it has been making ongoing efforts to enhance its China capabilities and this is
the third round of funding the company has received, bringing the total to $57m.
$35m of this was raised in February last year, also to accelerate growth of its preclinical
operations in China, part of which involved constructing a second vivarium. Bridge
claims to now operate the largest vivarium and US-level compliant pharmaceutical drug
testing lab in the country.
At the time, the firm had also recently completed the acquisition of the Preclinical
Division of Gene Logic, which was also funded by the cash injection.
China is growing in popularity as a destination for outsourcing stages of the drug

development process and in the preclinical arena it is particularly attractive due to the
country's efforts of late to specialise in the field, and the low costs involved.
Bridge has to compete for business in the country with domestic rivals WuXi
PharmaTech and ShangPharma that are also attracting new investment and new business
and growing larger by the month.
In February last year the firm launched a new training scheme between its facilities in the
US and China to enable its employees to cross train in both labs - a potential competitive
advantage for a contract research organisation (CRO) in China.
"The first thing that any prospective client looks at is our training records so the
advantage is critical," Glenn Rice, Bridge's (former) CEO, told Outsourcing-Pharma.com
at the time.
The Visiting Scholar Programme offered by the company was the first of its kind in the
preclinical CRO industry and the company then claimed to be the only pre-clinical CRO
to develop drugs to US level standards in Asia.
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Charles River accelerates China plans; reports profit jump
February 19, 2008
Charles River Laboratories has reported another profit jump in its Q4 2007 financial
results and has also stepped up its China plans as the demand for its preclinical services
in the country are said to be "robust".
In an analyst call related to its fourth quarter results, Jim Foster, company president,
chairman and CEO said that it is now speeding up its facility expansion programme in
China, where it is constructing a new 50,000 square foot laboratory, and is expecting to
begin offering good laboratory practice (GLP) preclinical services from the country by
the middle of this year instead of the first quarter of 2009.
Charles River has been operating in China since mid 2007 when it forged a joint venture
with a local firm Shanghai BioExplorer, which it later actually acquired.
Interestingly, Foster insists that to date, the company is not seeing its business in China
coming from international customers who are offshoring the work to them in a bid to
save money.
Foster clarified that its customer base is not domestic Chinese drug firms either. Instead,
the preclinical services the company performs in China are "to support the clients that we
have elsewhere in the world", in North America and in Europe, but whom also have a
base in China. These firms seek them out for services on discoveries that are made locally,
"where they're going to want a preclinical task force locally as well", said Foster.
Meanwhile, for the fourth quarter of 2007, the contract research organisation's (CRO's)
sales increased 17 per cent to $318.0m from $271.7m in the comparable 2006 period.
Operating income grew to $52.1m, up from 45.2m in the previous year, as did pre-tax
profit which came in at $51.1m compared to $44.5m. Charles River attributed the profit
gains primarily to the higher sales.
Sales for the Research Models and Services (RMS) segment were $145.2m in the fourth
quarter of 2007, an increase of 13.7 per cent from the fourth quarter of 2006. At the same
time the segment's operating margin increased 1.5 percentage points to 27.1 per cent.
"Sales growth was driven by strong demand for research models in the United States and
Europe, worldwide Transgenic Services, and In Vitro products", the firm said.
In the CRO's slightly larger Preclinical Services (PCS) unit, fourth quarter sales climbed
20 per cent year-over-year to $172.9m. "Continuing strong demand for general and
specialty toxicology services from pharmaceutical and biotechnology customers" was the
primary factor which contributed to the sales growth.
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However, the segment's operating margin simultaneously declined 2.9 percentage points
to 16.0 per cent. "As expected, the additional costs associated with the transition to the
new preclinical facilities in Massachusetts and Nevada and the negative impact of foreign
exchange in Canada resulted in lower operating margins for the PCS segment", the firm
said.
Looking forward, Charles River said it plans to boost its workforce by around 800
employees during the year - equivalent to an increase of around 10 per cent.
Immtech joins the China club
July 1, 2008
Immtech Pharmaceuticals has become the latest in a string of western research and
development services firms to announce a partnership with a peer in China in a bid to get
a foothold in this market of vast potential.
The US company has signed a Memorandum of Understanding (MoU) with Beijing

Capital Medical University (BCMU) in Beijing, one of China's leading academic medical
research centres, to form a joint venture later this year that will provide a range of
preclinical contract research services in the country on behalf of international biopharma
firms.
"As the world's most rapidly expanding market for healthcare products, China is poised
for explosive growth in research in the years ahead, especially related to early stage drug
discovery," said Mr Guo, director of BCMU Resource Management Center.
Specific services will range from research planning and risk assessment through to
preclinical and clinical study design.
"By combining our complementary resources and expertise, we will deliver high-quality
research services that will help companies to reduce the time and costs associated with
drug discovery," said Eric Sorkin, chairman and CEO of Immtech.
Eventually there is a plan in place to move the scope of services offered beyond the initial
focus of on early-stage drug discovery, to include the support of later-stage clinical
development, Sorkin explained.
This will include coordination with research sites, data management, monitoring and
reporting for clinical research programs, as well as providing counsel related to clinical
research regulatory guidelines and regulatory review procedures in China.
There have been a number of pairings of international companies with preclinical

services enterprises in China of late, as a number of domestic firms have been building up
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their experience in this area and are now drawing interest form international firms who
are eyeing China's cost-efficiency of developing drugs compared with the west, resulting
from the low-cost scientific talent, clinical trials and raw materials available in the
country (with a lowest estimate of 10 per cent of the cost of similar expertise in the US).
In addition, international firms are recognising the value that Chinese firms can offer in
terms of their familiarity with the domestic regulatory agencies and markets.
Alongside this, the Chinese government is strongly encouraging foreign companies to

develop their products in the country.
Only last week China's top contract research organisation (CRO) WuXi PharmaTech
formed a joint venture with its US-based peer Covance, in a deal which will create a
powerhouse in drug development services.
The 50-50 joint venture has been created to "provide world-class preclinical contract
research services in China" as the companies look to capitalise on the rise in outsourcing.
In January this year, US-based MPI Research and China's Shanghai Medicilon formed a
preclinical services joint venture in China and in February, Europe's Novasecta formed an
WuXi broke planned deal with Covance
October 6, 2008
The much-trumpeted partnership between China’s WuXi PharmaTech and Covance to

provide ‘world class preclinical research services’ has been called off.
At the time the deal was announced back in June questions were raised about the deal
from WuXi’s perspective. Although the companies had said one of the benefits was to
broaden WuXi’s client base, the Chinese company has been doing spectacularly well of
late in attracting clients on its own.
For Covance the benefits were more straightforward, with the JV providing it with a
foothold in China, with the inherent benefits of lower wages and higher margins the
nation can bring.
The JV was intended to be run out of a 323,450 sq. ft. facility which is currently being
constructed by WuXi in Suzhou, China, and is due to be completed in 2009.
Neither company was prepared to give a reason for the decision, although both issued
statements asserting their ability to compete in the preclinical services segment in China.
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WuXi insisted that it would press on with the construction of the facility and “plans to
offer a full-range of preclinical services and GLP toxicology capabilities ... helping WuXi
clients to improve the success of discovery and shorten the time of development.”
Dr Ge Li, WuXi’s chairman and CEO, said the facility was being built through already-
budgeted capital expenditures and will not require additional funding. He added that the
move would allow WuXi’s shareholders to receive “maximum benefit”, which might
suggest that some were unhappy about signing away 50 per cent of the profits from the
facility.
For its part, Covance said it had decided to “pursue its original preclinical strategy in
China.”
In an equally combative statement, the CRO said it would build its own “world-class
preclinical facility in the region and aggressively compete as the global market leader in a
business we know very well.”
The firm added that it would build the same array of preclinical services that it already
offers in Europe and the US, and that these would complement its existing Phase II/III
clinical development, central laboratory and bioanalytical capability in China.
There is also speculation that the firm's priorities have changed in the wake of its
strategic $1.6bn alliance with Eli Lilly.
The question now is whether WuXi can do as well on its own as it would with Covance’s
help. Dr Li seems convinced, arguing that the firm already has relevant expertise and
capability in place as a result of its $151m acquisition of US firm AppTec Laboratory
Services.
Charles River opens preclinical centre in Shanghai
October 16, 2008
Charles River Laboratories has opened a new preclinical development facility in

Shanghai, China which, the firm says, will act as a centre of excellence and help
strengthen its position in the global outsourcing market.
The new 60,000 square foot site is designed to serve both the emerging Chinese and
global drug sectors and is compliant with rules laid down by the US Food and Drug
Administration (FDA), the Chinese state regulators (SFDA) and the Organization for
Economic Cooperation and Development (OECD).
The US Association for Assessment and Accreditation of Laboratory Animal Care

(AAALAC) and the Canadian Council of Animal Care (CCAC) have also approved
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operations at the site, enabling it to carry out the full range of preclinical development
work.
The Shanghai site is expected to begin providing good laboratory practice (GLP)
accredited development services in the first quarter next year.
James Foster, Charles River’s CEO, commented that: “As our clients make their initial
forays into China, we are creating a centre of excellence that embodies global best
practices along side them.
“The same high standards of research, safety, humane care and good laboratory practices
that globally distinguish Charles River are replicated [at the] facility,” added Foster.
In a press statement the company also laid out its belief that China’s emerging drug
market will see the country evolve into a key innovation hub for the global
pharmaceutical industry in the coming years.
Charles River said that its new base “will help foster this culture by helping
multinationals as well as local biopharmaceutical organizations accelerate their drug
development programmes”.
While some emerging pharmaceutical markets like India and Southeast Asia have
focused on providing manufacturing rather than development capacity, in China the
preclinical and trial sectors are already quite well established.
A recent Ewing Marion Kauffman Foundation report, “The globalization of innovation:

Pharmaceuticals” which was published earlier this year, concluded that part of the
difference lies in the fact that Chinese scientists are developing the ability to innovate due
to the influx of R&D from big pharma that has taken place in recent years.
As a result there is considerable and growing demand for preclinical services in the
country. Further evidence for this is indicated by WuXi Pharmaceuticals decision to press
ahead with the development of a preclinical facility despite the withdrawal of partner
Covance.
Covance plans for preclinical in China
October 27, 2008
Covance has given more details of its plans for China, with CEO Joe Herring suggesting
there will not be a big shift in work from the US and Europe to the nation.
This idea is underpinned by Herring’s belief that there will be “large equilibrium in
labour rates”, which would reduce the appeal of operating in China.
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Despite this Covance is still pursuing its expansion into China, following the temporary
blip resulting from the collapse of the deal with WuXi.
In the second half of 2009 Herring predicts that multi-nationals will start to want to
conduct work in animal models in China but is unconcerned by Covance’s likely inability
to fulfill these needs.
This is in part due to the sums of money involved, with Herring referring to two leading
pharmaceutical companies that were both seeking to take out $300,000 to $400,000
preclinical contracts in China late next year.
Owing to the scale of these contracts Herring said Covance will not be making a
“massive investment” in China and will look to grow as the market grows.
The intention now is to have the preclinical site operational around 2011, which would
add to Covance’s current capacity in China.
While admitting that “it would be great if [Covance] had a facility online” by late 2009,
Herring remained confident that if Covance has preclinical space in China by 2011 the
company “will do fine” in the nation.
Land is yet to be purchased for the preclinical facility, which Covance claims will be a
match for the standards in its US and European sites.
PharmaLegacy Opens facility in China
Oct 27, 2008
PharmaLegacy Laboratories Co., Ltd held its Grand Opening in Shanghai’s Zhangjiang
Hi-Tech Park. The CRO, which offers specialty pre-clinical pharmacology services, has
expertise in the areas of oncology, bone, orthopedics, inflammation, immune disease, and
PD/PK.
PharmaLegacy is founded by a group of experienced veterans who boast a lot of

experience in pharmacology in three major disease areas, oncology, bone and
inflammation/immune diseases.
PharmaLegacy began renovating its Shanghai office space in April, started recruiting in
May, moved in during July, and held its Grand Opening in October.
The company is now fully operational and starts in self-sustaining mode. It has been
validating its models for 3 months, and as a result, the company’s model validation is
now 80% complete. The company now has 60 employees, 45 of them researchers. The
company hopes to have 85 employees by year end.
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PharmaLegacy’s execution is GLP based, though the company doesn’t plan to claim GLP
until it is audited. As an added plus, PharmaLegacy is the first company in China to
install BioBook® (from IDBS in the UK) as its data management tool. In the BioBook
system, every researcher has a seat license and must log into the system. All
measurements are electronically input automatically. This means data cannot be
manipulated, and all data can be traced back. Because only the people working on project
can access the data, BioBook also protects IP.
PharmaLegacy is backed by Latona Associates, a private equity company in the US. At

one time, Latona owned Fisher Scientific Company, which it sold to Thermo Electron.
Pfizer now use WuXi PharmaTech for preclinical research
November 07, 2008
SHANGHAI, China, Nov. 7 /Xinhua-PRNewswire/ -- WuXi PharmaTech (NYSE: WX),

a leading pharmaceutical, biotechnology and medical device research and development
outsourcing company with operations in China and the United States, announced today
that it has signed a new three-year, in vitro ADME collaboration agreement with Pfizer.
WuXi PharmaTech has enjoyed a close and cooperative relationship with Pfizer for many
years, with collaborations ranging from synthetic chemistry, parallel medicinal chemistry
(PMC), and ADME to bioanalytical services.
"This new agreement further strengthens our already productive relationship with Pfizer,
one of our largest customers for many years, and it is the direct result of our research
capability and firm commitment to quality and customer satisfaction," commented Dr. Ge
Li, Chairman and Chief Executive Officer of WuXi PharmaTech.
Under the new collaboration agreement WuXi PharmaTech in partnership with Pfizer
will establish ADME assays to provide in vitro screening services on compounds WuXi
PharmaTech synthesizes for Pfizer.
"A high quality and flexible Asia R&D partnership network is critical to Pfizer's
emerging market and Asia strategy. We want to build strong relationship with leading
Contract Research Organizations such as WuXi PharmaTech to tap into the scientific
talents and R&D capabilities in Asia," commented Dr. Steve Yang, Vice President and
Head of Asia R&D at Pfizer.
The evaluation of ADME properties is a key step in the drug discovery and development
process. WuXi will evaluate ADME properties for Pfizer compounds with the goal of
providing this key information to assist Pfizer scientists to improve the pharmacokinetic
properties of their compounds.
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WuXi PharmaTech Shanghai Rodent Facility Awarded AAALAC Accreditation
December 18, 2008
SHANGHAI, China, Dec. 18 /PRNewswire-Asia/ -- WuXi PharmaTech (NYSE: WX), a

leading pharmaceutical, biotechnology and medical device research and development
outsourcing company with operations in China and the United States, announced today
that its rodent facility in Shanghai has received accreditation from the Association for the
Assessment and Accreditation of Laboratory Animal Care (AAALAC) International.
AAALAC International is a private, nonprofit organization that promotes the humane

treatment of animals in science through voluntary accreditation and assessment programs.
As a result of an extensive on-site evaluation, AAALAC determined that WuXi
PharmaTech's rodent facility is committed to the highest level of animal care and
research practices.
AAALAC noted the following in its official approval letter: "The WuXi PharmaTech
China management and staff are commended for providing good facilities and programs
for the care and use of laboratory animals. Especially noteworthy were the strong
institutional commitment to the animal care and use program; the conscientious and
capable Institutional Animal Care and Use Committee (IACUC); the knowledgeable and
experienced animal care and use staff; excellent documentation (Standard Operating
Procedures and guidelines) and records; and a well maintained, state-of-the-art facility.
The attention to detail and completeness was exceptional."
"The AAALAC accreditation comes as a result of our efforts in expanding service

capabilities from chemistry to preclinical drug development including drug metabolism
(DMPK) Ge Li, Chairman and Chief Executive Officer of WuXi PharmaTech. "We are
pleased to receive such high praise from the leading independent world body on the care
and use of laboratory animals and we could not be more proud of the report issued by
AAALAC. We are confident of being at the top of our industry with the endorsement of
AAALAC."
BioDuro Labs Accredited by AAALAC
December 11, 2008
BioDuro, a CRO headquartered in San Diego, CA, but with its laboratories in Beijing,
China, announced that it has been awarded full accreditation from the Association for
Assessment and Accreditation of Laboratory Animal Care International (AAALAC). The
same accreditation has been given to the labs of the National Center for Safety Evaluation
of Drugs (NCSED), with whom BioDuro has an exclusive collaboration.
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News on Clinical Research Service
Asian CROs poised for substantial growth
April 3, 2008
The Asia Pacific region is poised to witness heightened activity in terms of outsourced
drug development to contract research organisations (CROs), with India and China
remaining the preferred destinations.
Recent estimates by Frost & Sullivan have determined that Asian CROs conducting
Phase I-IV research earned revenues of $1.2bn in 2006, with the figure expected to reach
$2bn in the next two years.
This ties in with a report by market research firm Research and Markets, where it was
predicted that outsourcing spending by biopharma firms across all phases of
pharmaceutical development is projected to increase in Asia in the next one to two years,
with the quantum of increase for phase II, phase III, and phase IV trial budgets likely to
be higher than preclinical and phase I budgets.
Meanwhile, the report also found that over the next two years, urology and
musculoskeletal/arthritis are expected to be the most outsourced research areas.
"The potential for CROs lies in expanding their strengths in musculoskeletal/arthritis and
urology and maintaining capabilities in oncology, cardiovascular, dermatology, and
gastroenterology", the company said.
In India, outsourcing largely takes place between Phases II-IV, and interactive voice
response systems (IVRS) as well as medical diagnostics are the services that are
outsourced the most.
The country's low cost base, large treatment naïve patient pool, and command of English
are the major attractions here.
While cardiovascular, central nervous system (CNS) and metabolic diseases are the
research areas that are currently the most outsourced, oncology is likely to show an
increase in outsourcing in the next two years, predicted Research and Markets.
Meanwhile, Australia, Taiwan, Hong Kong, and to a lesser degree, South Korea and
Japan, are among the other countries in the Asia Pacific tipped by Research and Markets
to experience an increase in the number of CRO-conducted clinical trials.
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With regard to Japan, South Korea, and Australia, diseases affecting the CNS are likely
to be among the most outsourced research areas, with Japan also likely to attract studies
in the additional therapeutic areas of allergy/respiratory, pain management, and
dermatology.
The report is titled: "Contract Research Organization Market - What Pharmaceutical and
Biotechnology Companies Want."
China to benefit if India tightens clinical trial rules
November 17, 2008
A UK development think-tank has warned against a knee-jerk reaction against

conducting clinical trials in India, following the revelation a few weeks ago that dozens
of children had lost their lives in studies conducted at a contract research facility.
The Campaign for Fighting Diseases, part of the UK-based International Policy Network,
says in a report that to remove support for India’s emerging clinical trials industry would
be a mistake.
"Although it is not clear if the clinical trials were culpable, should the inquiry suggest
new regulations, the real winner will be the Chinese economy rather than Indian
patients," write the report's authors, Philip Stevens and Julian Harris.
They suggest that even if wrongdoing is uncovered, the fault will lie in the enforcement
of existing regulations, rather than a need to implement new laws.
There were 49 infant deaths reported from trials at the All-India Institute of Medical
Sciences in New Delhi. Because contract research is conducted at AIIMS for
pharmaceutical companies, the deaths have caused some to question the safety and
morality of multinationals conducting clinical trials in India.
Health minister Anbumani Ramadoss is pushing for a government inquiry into the matter,
to ensure that poor people are not used as “guinea pigs.”
There is no question that India is a very attractive location for clinical trials, as it has a
fast-developing medical infrastructure, and a huge population which has little exposure to
pharmacological treatments and is motivated to take part in studies. In addition, there is a
large number of English-speaking physicians and scientists – and faster data processing
times.
With India already a global powerhouse in pharmaceutical manufacturing, initially

focusing on chemical ingredients but latterly moving into secondary production,
observers believe it is only a matter of time before a satellite clinical research industry
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becomes established. Consultancy company McKinsey predicts the sector will be worth
$1.5-$2bn by 2010.
One of the key drivers for that is the estimated 60 per cent saving on the expense of
running a study in India compared to the USA, where a typical trial costs upwards of
$150m. That provides a clear cost-incentive to the industry.
Regulations have already been tightened up to improve standards in clinical research, as

part of a wide range of drug industry legislative reforms that came into effect in 2005,
bringing the country into line with standards drawn up by the World Health Organization
and the International Conference on Harmonization.
Any attempt to add further regulatory restrictions could incite clinical trial firms to shift
their attention to China, as well as potentially reduce the number of new medicines
becoming available to Indian patients.
“In 2007, the consulting firm AT Kearney ranked China above India as the most
attractive location for clinical trials,” according to the report’s authors.
“Like India, it has a vast pool of patients, ethnically distinct groups and a growing respect
for intellectual property.”
PPD initiates central lab services in China
January 31, 2008
Pharmaceutical Product Development (PPD) has initiated central laboratory services in

China in response to the country's budding clinical trials scene.
The US-based contract research organisation (CRO) has formed an exclusive agreement
with Peking Union Lawke Biomedical Development Limited (PUL) that has allowed it to
"begin immediately" providing its central lab services to biopharma firms in the country.
The firm currently has other central labs in Brussels, Belgium and Kentucky in the US
and said that China's attractiveness lies in the fact that it is a "high-growth clinical
research market." PPD, along with several other global CROs already currently run
clinical trials in China.
Agostino Fede, director of PPD's global central labs operation said that the presence of a
central lab in China will also save its clients time and money by providing lab results
"more quickly without incurring expenses for exporting shipments."
"Chinese law makes it extremely difficult to export lab samples to other countries for
testing," said Fede.
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It also saves our clients time and money by providing lab results "more quickly without
incurring expenses for exporting shipments."
PPD is not the only CRO to have this idea. Its larger rival Quintiles also expanded its
Global Central Laboratories and Clinical Development Services units in china (Beijing)
earlier this month.
Under PPD's new arrangement, the firm will also operate the new lab services from a
base in Beijing, where the country's largest life sciences park is located, having invested
in lab equipment on site that is "identical" to that of its other two central labs.
The firm said that its new China central lab will be networked with PPD's in-house
computer system and after completing a number of cross-validation and quality assurance
measures, it is expected to deliver laboratory data that are "directly combinable."
PPD, as with many of the large CROs, has been making preparations to increase its
presence in new and emerging geographic locations, although it may be taking extra
pains to be seen to be branching out globally.
The company generates two thirds of its sales in the US, but has been conscious of
developing its operations beyond US borders since July last year when several analysts
expressed concern that the firm was not capitalising enough on conducting business
outside the country.
At the end of July, PPD announced it would expand its operations in Scotland and more
than double its workforce over the next three years. Several months later, the company
announced the opening of site in four new global locations - Copenhagen, Denmark;
Sydney, Australia; Lima, Peru and Lisbon, Portugal.
Since October, it has also made a number of key appointments in a bid to bolster its
global activities.
Earlier this month the firm hired a new senior member of management to oversee the
company's Phase II-IV clinical operations in Europe, Middle East and Africa (EMEA)
and lead its expansion plans in the budding region.
"EMEA has been and will continue to be a very large and important region for PPD
clinical research operations", said William Sharbaugh, chief operating officer of PPD.
Sebastian Pacios now holds the position of PPD's senior vice president of clinical
operations for EMEA, moving to the post from rival firm PRA International where he
served as vice president, responsible for clinical research and project management in
Europe, Africa and Asia-Pacific.
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Omnicare broaches China's borders
By Kirsty Barnes 25-Feb-2008 –
Omnicare Clinical Research has decided to formally broach China's borders with the
opening of its first two offices in the country.
The firm's president and CEO Dr Dale Evans said that the two new locations in Shanghai
and Beijing "represent a vital component of our Asia Pacific business strategy".
"The region is a burgeoning centre of drug development that offers numerous advantages.
We're committed to the marketplace here and our new offices will help us provide clients
with an even greater level of support. Our presence in China is another step in our global
expansion."
Indeed, Omnicare is one of many contract research organisations (CROs) now scrambling
for global expansion in a bid to keep up with an industry that is spreading across the
world.
The Asia Pacific, and China in particular, is emerging as a popular new location for
CROs to set up.
Big pharma firms are fast investing and building their businesses in China attracted by a
highly skilled, low-cost workforce and the vast potential offered by the Chinese market.
In addition, clinical trials conducted in China provide access to a large population

offering a potentially huge pool of patients - a major attractive point for drug makers as it
is a big factor in speeding up the time and cost of clinical studies.
For example, according to a recent report published by the UK Trade and Investment
(UKTI) department, the local Chinese industry estimates that Phase I trials can be
conducted in China for around 15 per cent of the equivalent cost in a Western country,
while Phase II studies cost 20 per cent of the price in the west.
Omnicare has already had a business presence in China since 2001, but its new offices,
which will conduct project management, clinical trial services, regulatory affairs and
business development, now cement its relationship with the country.
The company's other established offices in the Asia Pacific region include Australia,
India, Japan, Singapore and Taiwan.
Meanwhile, rival firms have also been making the moves on China of late. Some have
gone down the same route as Omnicare and opened up their own operations in China
while others have chosen to form alliances with domestic firms already operating in the
country.
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An example of this was announced last week when Europe's Novasecta formed an
Moreover, home-grown Chinese firms are also gaining momentum. In November China's
second largest CRO ShangPharma attracted $30m (€21m) from US private investment
firm TPG.
Tigermed Builds Up Phase I CRO Services
December 1, 2008
Tigermed Consulting Co., Ltd, a CRO with a clinical trial focus, has established a
subsidiary, Hunan Tigermed Xiangya Drug R&D Ltd. Tigermed Xiangya, a collaboration
with Central South University (CSU), will increase Tigermed’s services in pre-clinical
drug studies and pharmaceutical analysis by giving the company a Phase I Clinical
Laboratory.
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News on Contract Manufacturing Service
WuXi ends US biologics manufacture; focus on testing
December 2, 2008
WuXi PharmaTech is to discontinue its US biologics manufacturing operations as it

attempts to cut costs, with 100 employees due to lose their jobs.
The move will affect employees at WuXi’s facility in Philadelphia, which will now focus
solely on biologics testing, cell banking and cell therapy services. This facility was
acquired in the takeover of AppTec, which gave WuXi biologics capacity and a base in
the US.
WuXi says it initiated the change as it anticipates that its US biologics manufacturing
operations will account for less than four per cent of total revenues in 2008. The company
believes that it will realise $10m in annual cost savings as a result of the move.
The cessation of biologic manufacturing in Philadelphia will be complete by the end of

2008, costing the company an initial $2.5m to $3.5m before savings are realised in 2009.
WuXi’s action comes after disappointing third quarter results that led to the company
knocking $20m to $40m off its expected yearly revenues. This downturn affected many
of WuXi’s divisions but had not been anticipated by its biologic manufacturing
operations.
Speaking during the second quarter conference call Benson Tsang, WuXi’s chief
financial officer, said he believed that the biologics manufacturing division’s revenues
and margins would continue to grow through 2008.
This growth has been hindered by the global economic climate, with WuXi saying in its
third quarter results that a number of small biotechs had delayed or cancelled biologic
manufacturing contracts in response to financial pressures.
Although WuXi was previously positive about the fate of the division it has been explicit
about its desire to use its biologics knowledge gained from the AppTec acquisition to set
up similar operations in China.
Speaking during the second quarter conference call Ge Li, chairman and CEO, said: “We
plan to leverage knowledge, know-how we obtained through our acquisitions to replicate
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our capabilities in biologics, manufacturing, and the process development service in
China.”
In addition when a new leadership team was installed at the Philadelphia site Edward Hu,
Wuxi’s chief operating officer, said they would play an “important role” in the transfer of
biological capability to China.
At this time it is not clear how stopping biologic manufacture at Philadelphia will impact
on existing clients or whether WuXi intends to create additional capacity in China.
Staff from the Philadelphia facility assisted in the setting up of WuXi’s molecular
biology lab in Shanghai and the company is also planning on constructing a microbiology
and packaging testing laboratory in China.
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News on Medical Devise/Instruments
Tecan Expands Operations In China And Asia Pacific
November 3, 2008
Tecan has opened its new Asia Pacific region headquarters, based in the heart of
Shanghai's pharmaceutical and life science centre. The launch of the regional
headquarters reflects the Company's significant growth and strong commitment to the
market in China, as well as the whole Asia Pacific region, and will improve service and
support for customers and distribution partners alike.
The new office was opened by Thomas Bachmann, CEO of the Tecan Group, on the 28th
October, 2008, at a ceremony attended by key customers from around the Asia Pacific
region, major distributors, officials and representatives from key Chinese Provinces, the
Swiss and Austrian Embassies in China and the Tecan Group. Guests were welcomed to
the Shanghai office by the CEO and an official from the Chinese Government, and were
treated to a traditional Chinese ceremonial inauguration of the facility, followed by a
celebratory dinner.
Under the new terms, the new Asia Pacific headquarters in Shanghai will now sell
directly to many of the major multinational biotechnology, pharmaceutical and diagnostic
companies flourishing in this rapidly developing area. Tecan's long-established Beijing
operations will maintain close regional relationships with its customers in China.
Similarly, a crucial well-established network of distributors will continue to cover the
Asia Pacific region as before, including the important after-sales customer support. Tecan
will also be able to support its distributors in these efforts by providing training,
warehousing of spare parts and improved services out of Shanghai.
Mr Bachmann said: "We are delighted to be making this positive move into what is
almost certainly one of the fastest growing regions in life sciences today. With a stronger
presence and new facilities, we will be able to improve sales coverage, service and
support to all of our customers and partners in the entire Asia Pacific region."
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Cook Medical to Open Asia Regional Center in Shanghai
December 12, 2008
Cook Medical, a privately owned medical device company located in Bloomington IN,
will open a combined distribution and customer service center in Shanghai. The 50
million RMB ($7.3 million) center will serve as Cook Medical’s base for its operations in
China and Southeast Asia. By improving service to its customers, Cook Medical expects
to increase its penetration of the China and Southeast Asia markets.
Shinva and GE Healthcare Form Medical Device JV
December 29, 2008
Shinva Medical Instrument and GE Healthcare will form a medical device JV, called
Xinhua GE Medical Systems, with a total investment of $25 million. The new company
will focus on diagnostic X-ray equipment and be involved in R&D, manufacturing and
sales. It will also develop additional equipment and software. Under the agreement,
Shinva will hold a 51% stake of the new company, and GE will hold the remaining 49%.
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News on Biological Testing Service
BioCurex to Offer Cancer Tests in Shanghai
Nov 5, 2008
BioCurex Inc., headquartered in the Vancouver area, has completed the incorporation
process for a fully-owned subsidiary, BioCurex China, which will be sited in Shanghai.
The new company will operate initially as a clinical laboratory that will perform cancer
tests, using BioCurex’s proprietary RECAF™ technology.
ProGenTech to Develop Diagnostics with China’s CDC
December 22, 2008
ProGenTech, a molecular diagnostics company headquartered in California but with its

operations in Shanghai, signed a collaboration agreement with the China’s Center for
Disease Control and Prevention (China CDC) to create a joint laboratory. The lab will
focus on developing next generation molecular diagnostic systems and assays, using
ProGenTech’s Entura instrument platform.
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News on Service of Outsourcing Service
Drug Information Association (DIA) Opens New Office In China
November 19, 2008 Pharmaceutical Online" <info@pharmaceuticalonline.com
The Drug Information Association (DIA), the premier, multidisciplinary, non-profit

association that provides a neutral forum for the exchange of information critical to the
advancement of the drug discovery and lifecycle management processes, has opened an
office in Beijing, China.
"China's pharmaceutical industry has become a major force in drug discovery and
development," explains William Brassington, Acting DIA Worldwide Executive Director.
"As the premier provider of neutral global forums for the exchange of information,
education, and training, it is imperative that we solidify our presence in the region."
DIA's regional office in China adds another dimension to DIA's worldwide operations.
DIA's headquarters in Horsham, PA (USA) is supported by regional offices in Basel,
Switzerland, Tokyo, Japan, and Mumbai, India.
"DIA's success in China depends on our ability to engage local thought leaders in DIA's
unique educational and networking events, where they will be able to exchange
professional experiences," says Marie Dray, President, DIA Board of Directors.
The Provisional Advisory Council of China (pACC) was established in May 2008 and
will continue to provide support and strategic oversight for DIA's presence in China. The
pACC will focus on developing a strong membership and volunteer base, strategic
alliances, conferences and training programs, and local and student chapters. DIA Board
Member Ling Su, PhD, Vice President, Clinical Research & Development - Asia Pacific,
Wyeth, China, is pACC chair.
"An influx of western-trained scientists and increased access to global markets are
extending the development opportunities available in China," says Ling Su. "DIA's
presence in China will certainly contribute to meeting the enormous needs in training,
education, and information sharing and exchange in global drug development and access
to new medicines. DIA will follow the same successful formula used in North America,
Europe, Japan, and India while working collaboratively with the SFDA, the China-based
pharmaceutical industry, CROs, research institutions and other stakeholders." In China,
DIA has partnered with the Kellen Company to provide management and logistical
support. With offices in the U.S., Europe, and China, Kellen offers a complete range of
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services to international, national and regional associations, professional societies,
foundations, and businesses. Kellen will provide:
Full office outsourced management of DIA in China

Management and logistical support for pACC activities
Conference and training course organization and support
Membership development and recruitment
"DIA is confident that Dr. Ling Su, with the support of an outstanding headquarters team
and an experienced local agency, will lead DIA's volunteer advisory council in China in
an effort to expand our capabilities in the region," explains Dray.
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Chinese Companies Use Service Provided by Western

Companies
QIAGEN and Shanghai Biochip Corp. Sign Collaboration Agreement
May 30, 2008
Shanghai, May 30, 2008 - (ACN Newswire) - QIAGEN today announced that it has been
selected by Shanghai Biochip Corporation (SBC) as a primary partner to supply various
small interfering RNA (siRNA) library sets. SBC will use these library sets for setting up
the first siRNA high-throughput screening center in China.
siRNAs are synthetic RNA assay molecules which have the ability to turn genes "on" and
"off" (RNA interference, RNAi). They are used for functional gene analysis and thus play
a major role in drug development. "We are very pleased that SBC has selected QIAGEN
as its partner and primary siRNA supplier", said Dr. Frauke Ehlert, General Manager of
QIAGEN China/ HK. "SBC is one of China's largest service providers and R&D centers
for systems biology research and drug discovery. This collaboration further expands
QIAGEN's position as a leading supplier of innovative solutions."
Songmin Xie, the operation manager of the RNAi screening center, commented: "The
sophisticated siRNA design, broad coverage of human gene families, and excellent
technical support are the main reasons why SBC selected QIAGEN Asia as the supply
partner for the siRNA library." In forging this partnership, the Shanghai Biochip
Corporation gains access to the largest portfolio of siRNA sets as well as the most
advanced design algorithm available. This, accompanied by a comprehensive support
structure, equips SBC to accomplish their goals to provide customers cutting edge
solutions for drug discovery and development.
Sartorius Stedim Biotech Signs Agreement With WuXi AppTec
July 1, 2008
Sartorius Stedim Biotech has entered into an agreement with WuXi AppTec, Inc., a
wholly owned operating subsidiary of WuXi PharmaTech, to cooperate on viral clearance
studies. Under this agreement, WuXi AppTec will provide the relevant viruses, materials
and methodologies to Sartorius Stedim Biotech to employ in conducting non GLP viral
clearance testing of its tech-nologies with customer products and for supporting its own
research and development activities.
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Sartorius Stedim Biotech markets an orthogonal and fully integrated three-step viral
clearance technology platform to the biopharmaceutical industry. To further support its
customers and to meet anticipated regulatory expectations, Sartorius has built an in-house
laboratory for non-GLP viral clearance testing of its technologies.
The cooperation with WuXi AppTec will benefit customers because non-GLP viral
clearance testing during early-stage process development will allow Sartorius to
recommend the best Viral Clearance Technology option. Sartorius and WuXi AppTec
will be using the same viruses, materials and methodologies so that customers can
reliably anticipate - at this very early stage – predictive study results of what might be
expected from WuXi AppTec´s GLP Viral Clear-ance testing of the same product as part
of the IND process and ultimately the Phase 3 validation process.
Viral clearance studies performed during the early stage of process develop-ment often
help process decisions and provide information about the viral inactivation or removal
mechanism. Major regulatory bodies around the world require that companies
demonstrate that their purification process has the ability to clear viruses before the drug
product receives marketing authorization.
"Viral clearance studies are gaining more importance at early stage process development
and with WuXi AppTec we have found an excellent partner to realize both early stage
non-GLP testing at Sartorius and GLP testing at WuXi AppTec," stated Reinhard Vogt,
Vice CEO Sales and Marketing and Member of the Board of Sartorius Stedim Biotech.
"We are very pleased to be able to partner with Sartorius Stedim Biotech in offering this
unique benefit for biopharmaceutical manufacturers," said WuXi AppTec Vice President
Larry Thomas. "It is a perfect fit with our company's commitment to providing clients
with seamless single-source solutions to help shorten the time from initial process
development to a successful IND."
Pharmatech Associates Leads Design For First FDA-Licensed Biomanufacturing

Facility In China
October 7, 2008
HAYWARD, Calif. --(Business Wire)-- Pharmatech Associates, a leading consultancy in

the regulated life sciences industry, has been chosen by Pacific Biopharma Group (PBG)
to provide the Basis of Design for the first FDA- and EMEA-approved biotechnology
manufacturing facility ever built in China.
The Basis of Design for the 181,000 square foot facility will be the first reference
document reviewed by the FDA as part of any licensure activity in China.
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The new facility is a showcase cGMP laboratory that uses state-of-the-art "single-use"
technology throughout the biomanufacturing process. It is located in Taizhou, Jiangsu
Province, in the emerging biomedical science park known as China Medical City (CMC).
CMC is considered to be one of the largest and most ambitious undertakings by any
nation to establish biomedical capabilities for the development of novel therapies for the
world marketplace.
"Pharmatech Associates understands every phase of the drug development lifecycle —

not just pharmaceutical construction," said Dr. S. Chang, VP Manufacturing, Pacific
Biopharma Group. "Their ability to integrate the critical considerations necessary for
international biological market approval is essential to the success of our program in
China."
"We are delighted that PBG chose Pharmatech for this endeavor. The project caters
directly to our deep understanding of product development, technology and international
compliance," said Bikash Chatterjee, President and CTO, Pharmatech Associates.
The project is a joint venture between PBG and CMC. In addition to manufacturing
biotechnology products for late-stage clinical supplies, the facility will be used for
development projects borne at the California Institute for Quantitative Biosciences (QB3)
whose lead campus is at University of California, San Francisco.
Honeywell inks China packaging deal
November 04, 2008
Honeywell has entered into a three-year agreement to supply its Aclar brand moisture-
barrier films to Shanghai Haishun Packaging Material.
The deal grants Honeywell increased access to the rapidly expanding packaging market,
which was worth $2.4bn in 2007 according to FriedlNet and Partners.
In turn Haishun gains access to Aclar to improve the quality of its products and will also
receive technical services and training from Honeywell.
Weir Lin, general manager of Haishun, said: "Honeywell has years of experience in
technology innovation and offers market advantages in the area of specialty films.
"Our agreement with Honeywell will upgrade the technology and quality level of our
products, and allow us to promote new moisture-barrier packing materials to
pharmaceutical manufacturers in China."
________________________________________________________________________
v
Honeywell promotes Aclar as being clear, chemical-resistant, non-flammable,
biochemically inert and free from plasticisers and stabilisers. These traits are coupled to
its effectiveness as a moisture barrier.
Aclar has been used in a range of applications from blister packaging to overwraps and
pouches, with the products flexible variant proving particular suitable for the latter uses.
Like many other companies Honeywell has been trying to establish a presence in China
and Asia-Pacific, with the opening of its technology centre in Shanghai intended to
achieve this.
However, Haishun will receive Aclar that has been manufactured at Honeywell’s plant in
Pottsville, Pennsylvania.
________________________________________________________________________

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JZMed, Inc.

China Pharma Outsourcing News Compile

What Happened to China Pharma

Selected News Compile

Table 1. News Coverage on China Pharma Outsourcing

Year Total numbers of piece of News coverage on

News on Major Pharma Companies in China

Novartis has big plans in China --------------------------------------------------------------------6

News on Investment Activities

Beijing Chemclin Biotech Co. received $16.5 million investment --------------------------15

JV formed between MPI Research and Medicilon --------------------------------------------17

European CRO joins first Chinese CRO alliance ----------------------------------------------20

WuXi PharmaTech makes its first acquisition -------------------------------------------------23

News on Drug Discovery Service

J&J signed another contract deal with WuXi PharmaTech -----------------------------------27

News on Preclinical Research Service

China become a hot place for preclinical services ---------------------------------------------28

News on Clinical Research Service

Asian CROs poised for substantial growth -----------------------------------------------------39

News on Contract Manufacturing Service

WuXi ends US biologics manufacture; focus on testing --------------------------------------45

News on Medical Devise/Instruments

Tecan Expands Operations In China And Asia Pacific ---------------------------------------47

News on Biological Testing Service

BioCurex to Offer Cancer Tests in Shanghai --------------------------------------------------49

News on Service of Outsourcing Service

Drug Information Association (DIA) Opens New Office In China -------------------------50

Chinese Companies Use Service Provided by Western Companies

QIAGEN and Shanghai Biochip Corp. Sign Collaboration Agreement --------------------52

News on Major Pharma Companies in China

Novartis has big plans in China

May 06, 2008

Novartis Seeks to Accelerate Growth in China

November 05, 2008

GSK to double R&D staff in China

August 07, 2008

GSK Signs Pre-JV Vaccine Pact with Shenzhen Neptunus Interlong

November 21, 2008

GlaxoSmithKline and Shenzhen Neptunus Interlong Bio-Technique Co. Ltd. (NIBT), an

Sanofi-Aventis to Market Seasonal Flu Vaccine in China

October 13, 2008

Sanofi invests in Chinese clinical R&D capacity

October 23, 2008

Closer academic links

Novo Nordisk made Major Investment in Its Tianjin Facility

November 07, 2008

Novo Nordisk announced on November 7 that it is investing close to US$400 million in a

Roche Announces Expansion in China

November 03, 2008

Roche currently cooperates with more than 80 international institutions including

Lilly Adds New Target to Hutchinson Meditech Collaboration

November 24, 2008

AZ to slash more European jobs and ramp-up China investment

November, 24, 2008

Astra looks East

From Europe to China: AZ Restructures Packing Strategy

November 26, 2008

“These moves are a continuation of AstraZeneca’s program to improve the organization’s

AstraZeneca announced proposed further investing in its Wuxi plant in China