Outsourcing R&D in Asia: A Case Study of Pfizer - Pharmaceutical Technology

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Outsourcing R&D in Asia: A Case Study of Pfizer
Gonghua Pan, associate director and head of the parallel medicinal chemistry sourcing operations at Pfizer, explains the evolution of the company's approach to outsourcing research and development from a line-or function-centric approach to an integrated sourcing model. This analysis includes the role that contract research organizations in Asia play in the company's outsourcing actvities.


Pharmaceutical Technology


Building the partnerships

After evaluating these options, Pfizer decided to shift its R&D outsourcing strategy from a "line-centric model to an integrated sourcing model," explains Pan. The integrated model favors working with one CRO that is able to provide chemistry, biology, and ADME screening and testing services. "Companies such as WuXi PharmaTech were identified as prototypical partners for such complicated services," says Pan.

Pfizer partnered with WuXi PharmaTech, a Shanghai-based CRO, in 2006. Pfizer and Merck & Co. (Whitehouse Station, NJ) were WuXi PharmaTech's two largest customers in 2006, respectively, accounting for 15.4% and 13.7% of the company's 2006 net revenues of $69.9 million. Pfizer, Merck, and Vertex Pharmaceuticals (Cambridge, MA) were the company's three largest customers in 2007, respectively accounting for 15.0%, 12.2%, and 11.2% of the company's 2007 net revenues of $135.2 million (1).

WuXi PharmaTech's operations are grouped into two segments: laboratory services, consisting of discovery chemistry, biology, toxicology, pharmaceutical development, analytical services, biopharmaceutical and medical-device testing, and other related contract R&D services; and manufacturing services, focusing on advanced intermediates, active pharmaceutical ingredients, and biologics-based manufacturing, testing, and related services. The company's discovery-chemistry services include lead generation, which involves designing and synthesizing libraries and templates for library synthesis, benchmark-compound synthesis, and custom synthesis. The company uses a traditional medicinal chemistry approach, a process through which a series of compounds are designed with computational chemistry and related structure-activity relationships, information analysis, followed by their chemical synthesis, biological activity and ADME property evaluation. The company's synthetic-chemistry services involve synthesis of assay standards and benchmark compounds (1).

The company's primary China-based facilities include a 630,000-ft2 R&D center in Shanghai, a 220,000-ft2 process-development and CGMP manufacturing plant in the Jinshan area of Shanghai, and a 130,000 ft2 R&D center in Tianjin, which is mainly focused on discovery-chemistry services. Earlier this year, WuXi PharmaTech acquired AppTec (St. Paul, MN), a provider of analytical testing, contract R&D, and biologics-manufacturing services. The acquisition gave WuXi three US-based facilities: a 63,000-ft2 R&D and manufacturing facility in St. Paul, Minnesota, a 46,000-ft2 testing facility in Atlanta, Georgia, and a 75,000-ft2 R&D, testing, and manufacturing facility in Philadelphia, Pennsylvania. The company is building a preclinical drug-safety evaluation center in Suzhou, which it expects to be operational in 2009. WuXi also recently completed a 22,000-ft2 CGMP pilot laboratory, located near its main facility in Shanghai. The facility is focused on formulation projects for Phase I and II clinical-trials-material manufacturing. In January 2007, the company began an expansion of its Jinshan facility by adding approximately 350,000 ft2, which will quadruple the capacity of its CGMP-quality facility with an additional 172,000 L of reactor volume. The new facility will concentrate on commercial production with advanced automation and cryogenic capability. The expansion is scheduled to begin operations in late 2008 (1).

In addition to WuXi PharmaTech, Pfizer has developed relationships with other CROs in Asia. These CROs include Chembiotek (Kolkata, India) and HD Biosciences (Shanghai). Chembiotek provides biology, chemistry, and preclinical research services at multiple sites in India, and HD Biosciences provides drug-discovery contract services.

In working with these CROs, execution is key. "We invest in local logistics and informatics to enable our pilot programs with these and other companies," says Pan. Drug samples are designed by Pfizer. Its chemistry partners in Asia prepare the samples and process them locally in Asia to enable downstream screening. This sample preparation and processing involves preparing plates for in vitro biology and ADME screening. The mother plate is kept locally in Asia in case additional material is needed. The remaining material is shipped to the US for future use.


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