WuXi PharmaTech stays ahead in China outsourcing

By Kirsty Barnes

- Last updated on GMT

Related tags: Wuxi pharmatech, Outsourcing

Shanghai-based biotech company WuXi PharmaTech has grown more than
100 times in the last 5 years after operating successfully in
China's infant biotech industry by providing variety of outsourcing
services in drug R&D.

The company's growth reflects the shifting focus of the pharmaceutical outsourcing industry to Asia, which offers a large pool of highly skilled, inexpensive scientific talent and low manufacturing costs.

>WuXi PharmaTech​ has positioned itself as a leader in the pharmaceutical R&D industry in China, and has ranked the 83rd in the 2005 Deloitte fast 500 Asian Pacific technology companies, which is based on percentage revenue growth over five years.

The top 500 companies were from a variety of technology businesses and industry sectors from across Asia Pacific. 16 per cent of the top 500 winners were from China and 4 per cent were from the bio-pharmaceutical sector.

The company ranked an impressive 9th in the same category last year and most recently was ranked 22nd in Deloitte Technology Fast 50 in China.

"We applaud the successes of WuXi PharmaTech and acknowledge it as one of the very few to accomplish such a fast growth rate over the past five years,"​ said Charles Yen, managing partner of Deloitte in China Northern Region.

China's biotechnology industry is still in its infancy, and although it is continuing to grow, pushed by the government and ambitious entrepreneurs, China's biotech success stories have been few and far between.

A recent survey conducted by Ernst & Young indicates that despite tax incentives offered by China, less than 20 per cent of pharmaceutical executives said they were investing in R&D in China.

Many Western companies are still reluctant to outsource drug R&D to Asia. For many, the low success rates, and long time horizons associated with drug discovery outweigh any cost savings that development and production in China might yield.

In addition to the language barrier, issues such as quality and infrastructure assurances and protecting intellectual property rights remain a major concern for investors.

Dr Ge Li, chairman and CEO of WuXi PharmaTech, attributes the company's strong revenue growth to many factors, including the trust and confidence that its customers place in the company due to its service quality and high regard for intellectual property protection.

The company now performs chemistry R&D outsourcing work for 18 out of the world's 20 largest pharmaceutical companies.

WuXi PharmaTech is also proving successful by providing a range of diverse outsourcing services in combinatorial, medicinal and synthetic chemistry aswell as manufacturing, in addition to traditional low-cost biotechnology R&D.

The company has been rapidly expanding its line of services, which range from early stage discovery chemistry through lead optimisation chemistry, all the way to process R&D and bulk manufacture of active pharmaceutical ingredients.

This year, WuXi PharmaTech is also expanding its outsourcing to include animal testing, where not only are cost differentials pronounced, but a more permissive ethical climate exists as Shanghai, at this stage, is beyond the reach of animal rights groups.

"WuXi PharmaTech has come of age in 2005 as we set our course to becoming a great service company. The company and the management team have matured and become more sophisticated in many ways. We will continue to focus on building a stronger service platform for our partners,"​ said Li.

Related topics: Clinical Development

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