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China’s WuXi, a Partner of San Diego’s TargeGen, Offers New Model for Drug Development

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the Chinese CRO, and Soll says WuXi’s work was limited to fee-for-service projects of well-defined scope. Yet WuXi’s scientists, many of whom had previous experience in U.S. research laboratories, were eager to expand their responsibilities. Over time, TargeGen has asked WuXi to help identify and analyze compound libraries using X-ray crystallography and computer modeling, supply intermediate compounds for drug development in accordance with U.S. good manufacturing practices, and use its FDA-approved laboratory facilities to measure drug concentrations from clinical trial blood samples.

“WuXi has gone from 12 employees to almost 3,000,” in less than a decade, said TargeGen co-founder and CEO Peter Ulrich. WuXi has focused its business on pre-clinical research services, but as Ulrich puts it, “Now they are a one-stop shopping center for clinical trials, medicinal chemistry studies, primate studies, you name it.” WuXi went public on the New York Stock Exchange in 2007 (NYSE: WX), and acquired Minnesota-based AppTec Laboratory Services, which provides contract research and testing services, in a 2008 deal valued at nearly $163 million. (Last month, Fast Company magazine ranked WuXi at No. 8 in its list of the top 50 fastest growing global companies.)

Ulrich emphasized that TargeGen didn’t go to WuXi “from the perspective of low-cost outsourcing.” Instead, the relationship has grown so deep that he now thinks of WuXi “as an extension of our own chemistry group.” By 2005, TargeGen and WuXi were working together “in a very synergistic fashion,” said Soll. “I was running with a chemistry group of about eight people. I supplemented that with another seven or eight people at WuXi, and we were only spending $1 million a year.”

For Ulrich and Royston, the key benefit was speed. “The drug that just completed Phase II clinical trials went from nothing more than an idea to everything needed to begin clinical trials in less than 18 months,” Royston said. “I consider that phenomenal.”

The potential for drug development really became … Next Page »

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  • We are now seeing the transfer of innovative medical technology following this pattern. The cost and time to market in the US due to US regulations and payment are driving innovators to look for more friendly environs.