WuXi PharmaTech Set For Sales Synergy with U.S. Subsidiary AppTec
Full article reprinted from PharmAsia News - June 9, 2008
BEIJING - WuXi PharmaTech, one of China's fastest-growing contract research organizations in the pharmaceutical and medical device sectors, is laying the groundwork to boost earnings through cross-selling synergies with its recently acquired U.S.-based biologics firm AppTec Laboratory Services.
WuXi, which provides research and manufacturing services for nine of the world's top pharmaceutical companies, should see strengthening profits in the second half of the year, as it integrates operations with AppTec and the combined companies start to share clients (PharmAsia News, May 29, 2008).
"Cross-selling between WuXi and AppTec should start to happen after the initial integration phase," Jinsong Du, equity research analyst at Credit Suisse in Hong Kong, told PharmAsia News. "Some of WuXi's top customers have shown interest in outsourcing biopharmaceutical projects to AppTec," he said.
WuXi, which currently performs contract research for many of Japan's leading pharma firms, could also steer some of these clients to AppTec, Du noted.
AppTec's recent agreement to partner with France's Sartorius Stedim Biotech on viral clearance studies, meanwhile, "will help boost our biosafety testing business," Hai Mi, WuXi's vice president of corporate communications, told PharmAsia News.
Under this agreement, AppTec will provide viruses and testing knowhow to Sartorius, which offers non-GLP viral clearance technology to the biopharmaceutical industry.
WuXi AppTec has a globally recognized edge in biosafety testing, Mi said, which led to the collaboration with the French biotech company. Sartorius is headquartered in Aubagne, France, and has manufacturing and R&D sites scattered across Europe, North America and Asia.
Viral clearance studies focus on virus inactivation, and are required by drug regulators worldwide as part of the approval process for new biopharmaceuticals.
AppTec provides testing for viral and recombinant protein vaccines, and custom designs biosafety procedures to meet regulatory guidelines that vary from country to country.
Over the medium- to long-term future, WuXi aims to expand its biologics operations, and to transfer part of AppTec's expertise in the sector to China.
"WuXi's biotech capabilities will be mainly in the U.S., but the U.S.-based people at AppTec will train the company's China-based scientists to do more things in this area in the future," said Du.
WuXi ultimately plans to complement its pharmaceutical and medical device business with biologics capabilities in China, but the Shanghai-based company does not yet have a firm timetable for the move, said VP Mi. The company began shuttling American and Chinese scientists betwen the two firms to exhange expertise and skills just months after the January merger (PharmAsia News, May 9, 2008).
-Kevin Holden
