Investment

Medical firm PPD set to hire

(China Daily)
Updated: 2010-10-28 11:09

Beijing - US-based medical research contractor Pharmaceutical Product Development Inc (PPD) is seeking acquisition opportunities and hiring more employees in China to support its growth in the emerging market.

Simon Britton, vice-president of PPD Asia-Pacific Clinical Development, said his company hopes to continue growth in China. The world's leading contract research organization (CRO) has become the biggest medical contractor in China by number of employees after last year's acquisition of Excel PharmaStudies Inc and BioDuro LLC.

According to the company's financial statement, these two deals cost PPD $100 million in cash, 25 percent of the company's total cash flow globally in 2009, and brought the number of staff on the payroll to 1,000.

Excel PharmaStudies was one of the largest CROs operating in China, offering clinical management, data management, biostatistics and regulatory and quality assurance services, while BioDuro LLC was a drug discovery outsourcing company focused on integrated drug discovery programs with a majority of its employees located in China.

By acquiring the two companies, PPD took ownership of BioDuro's more than 3,000-square-meters Beijing laboratory with its cutting-edge technology and Excel's 300 skilled employees. It also increased PPD's client base.

The Chinese CROs are attractive to large overseas companies, analysts said. Early this year, the US pre-clinical drug developer Charles River Laboratories International Inc wanted to buy WuXi PharmaTech for $1.6 billion, which was about 70 percent of the foreign company's market value at that time.

China has a soaring medical research market. According to market research firm Frost & Sullivan, China's outsourcing clinical research market is expected to exceed $300 million this year, up 26 percent year-on-year. The annual growth rate was 24.6 percent in 2009.

"We were getting huge demand for work to be done in China," Britton said. "What we see exploding in China is registration studies as people bring drugs already proved in other markets to China."

PPD has just opened a new office in Beijing, bringing in some existing PPD employees and an extra 300 from Excel. Britton said PPD is hoping to hire more in the future.

PPD opened its first Beijing office in 2003. In 2008, it expanded its global central laboratory services into China through an agreement with Peking Union Lawke Biomedical Development Limited.

"The cost of Chinese researchers in the local market is significantly lower than abroad. By paying 100,000 yuan a year in China, you can hire a researcher with a PhD degree. That's about one-fifth the cost of employing a foreigner," said Sha Jiang, a medical industry analyst from CEBM Group Ltd.

According to Sha, the Chinese domestic CRO is not as strong on clinical trials but good at chemical synthesis in comparison with overseas companies. He cited China's biggest CRO WuXi Pharmatech (Cayman) Inc as an example.

Britton said that his company does compete locally but, generally, PPD is more specialized in end-phase clinical trial research. "We believe there will be more early phase work being conducted in China," said Britton.

China Daily