Wuxi and PRA team in China

By Gareth Macdonald

- Last updated on GMT

PRA and Wuxi team in China
PRA and Wuxi team in China
Local knowledge and global experience should be enough to see PRA and Wuxi PharmaTech buck the trend of failed China JVs, says analyst.

The CROs unveiled plans for an - as yet unnamed - Phase I to IV joint venture (JV) last month, explaining that Wuxi will provide expertise of local regulations and lab capacity while PRA will bring its global reach and IT clout to the partnership.

The decision to partner with Wuxi fits with what PRA told Outsourcing-pharma.com​ after it opened an office in Beijing last August when it said the relative lack of competition, large subject pool and regulatory demand for local studies make China attractive for trials.

For Wuxi the collaboration further underlines its interest in expanding both its global reach and capabilities in the late phase trial services market, which is a key business area for PRA​.

John Kreger from William Blair and company raised the latter point in an investment note, suggesting that: “The partnership signals WuXi's intent to become as dominant of a market participant in the late-stage CRO market in China as it is within early stage.

He added that while at present Wuxi is a small player in China’s late-stage market – with just 90 specialist staff and a 60-strong site management team – partnering with PRA should allow it to catch local leaders like Tigermed Technology and global CROs already present.

Under the terms of this partnership, the clinical CRO employees will become a part of the joint venture, while the remaining employees, the site management, entity will remain a part of WuXi.

PRA is not expected to contribute as many employees we expect the total joint venture to have roughly 100 employees; rather, it will contribute its expertise conducting global clinical trials and IT-related tools. Throughout 2013, we expect aggressive hiring, perhaps doubling headcount by 2014​.”

China syndrome cured?

PRA is not the first global CRO to try and partner with Wuxi. In 2008, Covance was poised to team up with the Chinese contractor to offer preclinical services to pharmaceutical firms although that deal later collapsed.

The new deal is likely to avoid a similar fate according to Kreger, who suggested that the fit is better this time around.

We have seen several joint ventures between Chinese and Western CROs be less than successful, but the combination of WuXi's respected brand name and local market expertise and PRA's experience in managing large, global clinical trials and reputation for quality makes this a logical partnership that should improve each company's competitive position.”

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