August 2010

Outsourcing to Emerging Global Markets

 

Outsourcing to emerging global markets like China, India and Brazil is rapidly becoming popular in the biotechnology and pharmaceutical industry. Here, Richard Soll talks about the past, present and future of research and development outsourcing.

 

World-ScienceOutsourcing, which just a decade ago played a very small role in the biotechnology and pharmaceutical industry, steadily is becoming an integral part of the operation of such companies. And, among the numerous outsourcing destinations, contract research organizations in emerging global markets like China, India and Brazil rapidly are becoming the primary targets.

It’s an ascent that Richard Soll knows intimately. In 2001, Soll, then head of chemistry at a small company named 3D Pharmaceuticals, was unsuccessfully looking for an industrial partner to help build a combinatorial screening library. Then, with a bit of luck, he stumbled on a nascent CRO in China called WuXi (pronounced woo-she) PharmaTec that was willing to develop his library on a fee basis. Soll became Wuxi’s first customer.

Ten years later, that same company, now known as WuXi AppTec, brings in more than $250 million in yearly earnings while providing a full array of contract services to more than 500 clients worldwide, ranging from tiny startup companies to biotech behemoths, as well as private research institutes, nonprofits and even universities.

And Soll, who remained close to WuXi AppTec over the years, now oversees this process, having joined the company in 2008 to head their integrated services division. As someone who has been on the forefront of this growin relationship between pharmaceutical companies and CROs, ASBMB Today decided to ask Soll about the past, present and future of research and development outsourcing.

ASBMB: Is the practice of outsourcing aspects of drug development to CROs a relatively recent development in the business?
Soll: Well, companies have been outsourcing for a while, but primarily in areas referred to as “noncore services.” For core research areas like discovery biology, though, outsourcing services on a “cash and carry” basis was indeed fairly nonexistent 10 years ago; most large companies had the infrastructure to handle everything themselves. And, if you were a smaller company, that meant finding someone to assist you; the few places interested in working with you wanted a collaborative agreement, which included a large amount of money upfront.

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