BEIJING - Pfizer is set to ramp up its research and development center in Shanghai and to integrate more Chinese scientists into its worldwide virtual R&D network, including a new research deal with Wuxi PharmaTech, according to senior Pfizer executives in Shanghai and Hong Kong.

"Pfizer is building a virtual research and development network across Asia" that will support the company's global operations, said Steve Yang, vice president and head of Asia R&D at Pfizer.

As part of that drive, Pfizer is creating alliances with Chinese biotech firms, broadening ties with pharmaceutical contract research organizations, and searching for innovative scientists across the country.

Pfizer is also preparing to significantly increase the size of its China Research and Development Center in Shanghai, Yang said in an interview.

"We started the Shanghai R&D center with 13 people in 2005, and now have 300, and will continue to see headcount growth," he said. When the research outpost was set up at the Zhangjiang High-Tech Park in Shanghai three years ago, "Pfizer committed to spend $25 million over the next five years, but we have already exceeded this amount," Yang said.

Across the globe, "Pfizer is going through a major period of change," Yang noted.

Pfizer has undertaken a massive restructuring drive, streamlined the scope of its therapeutic areas of research, and launched its virtual research matrix.

The company recently announced that its worldwide reported revenues reached $11.97 billion in the third quarter of 2008, compared with $11.99 billion in the corresponding period of 2007. Reported net income for the July-September period of 2008 climbed to $2.28 billion from $761 million in the third quarter of 2007. Restructuring charges totaled $338 million in the third quarter of this year, compared with $437 million in the third quarter of 2007.

Meanwhile, Pfizer has created a new emerging markets business unit that will focus on Asia, Latin America and Russia, Yang said.

Julien Dedman, a Pfizer communications director based in Hong Kong, said the new group is "meant to find synergy among emerging markets around the globe, which certainly will include China and India."

As part of Pfizer's new focus on weaving a web of flexible and dynamic partnerships across the world and inside China, Yang said, Pfizer's corporate venture group invested in HD Biosciences. The funding for the Shanghai-based biotech outfit represented the Pfizer venture group's first investment in Asia, he added.

HD Biosciences announced in August it completed its first round of external financing with investments from Morningside Group, Lilly Asian Ventures and Pfizer Venture Investments (Also see "China’s HD Biosciences Completes Series A Financing; Led By Lilly, Pfizer And Morningside" - Scrip, 19 August, 2008.).

Pfizer is also stepping up its ties with WuXi PharmaTech, China's leading contract research organization in pharmaceuticals, Yang said. Pfizer and WuXi PharmaTech this month unveiled a new three-year agreement under which the Shanghai-based CRO will provide in vitro screening services on compounds synthesized for Pfizer.

"We have been providing more work for WuXi PharmaTech in line with the increasing evolution of services offered by WuXi," Yang said.

Following its acquisition in early 2008 of the U.S.-based biologics outfit AppTec Laboratory Services, WuXi PharmaTech began offering a range of biologics testing and manufacturing services (Also see "WuXi PharmaTech To Transfer Biologics Testing And Manufacturing From U.S. AppTec To New China Lab" - Scrip, 17 August, 2008.).

WuXi also plans to open a new preclinical testing facility in the Chinese east coast city of Suzhou in the second half of 2009 (Also see "WuXi Reports Expanded Research Deal With J&J And Higher Profits, But Also Sharper Risks Sparked By Global Financial Crisis" - Scrip, 16 October, 2008.). Pfizer's research ties with WuXi PharmaTech ultimately "could extend to the Suzhou preclinical testing facility," Yang predicted. "We will pay close attention to see if we will run pilot studies there," he said.

Pfizer's expanded channeling of research and investment into China, Yang said, was more closely tied to China's ongoing economic rise than to the declining financial outlook of the West.

"We don't want to make a direct linkage between the global financial crisis and Pfizer's outsourcing," Yang said.

Yet he acknowledged that "China's position in the world pharmaceutical market is certainly increasing."

"China," Yang said, "could become the second largest pharmaceutical market in the world in the next 30 years."

- Kevin Holden (pharmasia@elsevier.com)

Pfizer Increasing Size of China R&amp;D Center, Expanding Virtual Research Network Through Alliances With Chinese Scientists, WuXi PharmaTech

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Pfizer Increasing Size of China R&D Center, Expanding Virtual Research Network Through Alliances With Chinese Scientists, WuXi PharmaTech