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Wuxi comfortable with investment and risk profile of MedImmune JV

By Gareth Macdonald , 13-Sep-2012

Wuxi AppTec expects to add capacity as needed to service the partnership it formed with MedImmune and is comfortable with the level of investment required.

Earlier this week Wuxi and MedImmune, the biologics unit of Anglo Swedish pharmaceutical firm AstraZeneca, formed a joint venture (JV) to develop a candidate treatment for autoimmune disorders - MEDI5117 – for the Chinese market.

MedImmune told Outsourcing-pharma.com that Wuxi will provide regulatory, manufacturing, preclinical and clinical trial support. The US drugmaker added that its team will work closely with the CRO to ensure successful manufacturing, process development and quality control. 

The US firm added that: “We have been impressed with Wuxi’s ability to execute on its business operations to date and look forward to working together to address the healthcare needs of Chinese patients through the co-development of potential novel medicines such as MEDI5117.”

Risk sharing

Medimmune also explained that its decision to form a JV rather than simply outsourcing development to Wuxi was motivated by a desire to improve access to a key emerging market.

This strategic partnership will enable MedImmune to establish a leadership presence in developing novel biologics in China. Through this partnership, MedImmune will be one of the first multinational companies to bring a novel biologic to China. 

It’s also worth noting, WuXi AppTec will provide local manufacturing support. When undertaking clinical trial development in China, the government requires local manufacture of medicines that have not been approved in other markets.”  

Joint venture

Outsourcing-pharma.com also asked Wuxi for its take on the JV and its attitude to this type of risk sharing development deal. Company investor relations director Ron Aldridge told us that: “We expect to expand capacity as needed throughout the project.  

The partner in any joint venture assumes risks and returns beyond what a vendor assumes. WuXi is comfortable with the risk/reward profile of developing this molecule for China, and that is why we decided to enter into a joint venture rather than only performing contract services as a vendor."

Aldridge also stressed that Wuxi has a number of ways to generate revenue from the deal.

Returns require investment and time. WuXi potentially has three ways to earn returns for our shareholder: service revenue for services provided by WuXi in the near term for the joint venture, part ownership of commercialization rights for the molecule in China in the long term if MedImmune does not acquire full rights, and compensation from MedImmune in the intermediate term if they do acquire full rights. 

He reiterated that: “We are comfortable not only with the risk/return profile of this JV but also with the level of investment required and the time to attainment of returns.” 

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