Wilmington, Mass.-based contract research organization Charles River Laboratories offers drug discovery and development services to global pharmaceutical and biotechnology companies, government agencies, and leading academic institutions. Senior VP Christopher Perkins recently spoke with PharmAsia News about the company's operations in China and the landscape there for preclinical services.

PharmAsia News: In February, Charles River announced it would expand its operations in China by constructing a 50,000-square-foot preclinical services facility in Shanghai (Also see "Charles River Labs To Provide Western-Standard GLP Services in China" - Scrip, 25 February, 2008.). Can you tell us more about that decision?

Christopher Perkins: Charles River as a company is global. We've got more than 60 facilities in 15 countries. So, that's quite important, that we do have a greater global reach than any other CRO. Our headquarters are in Wilmington, with 60 years in business. So, we've got a long reputation within the industry. Sales for 2007 were $1.23 billion and growing. So, we're expanding, [with a] global reach.

Really, there are two main arms to the business. One of them being research models and services, which produces and sells the research models, and all the services associated with that, which links very closely into the second arm of our business, which is the preclinical services up to and including first-in-man Phase I studies.

We've really got a continuum and that makes us somewhat unique. Actually, I guess, totally unique among the significant-sized CROs because we're really niched into drug development. That's part of our accelerating drug development - trying to get the supplies to do the work and complete the work faster and more efficiently to meet the needs of our clients.

Our client base is all around discovery and development and safe manufacture. Our client base, obviously, therefore, includes most of the leading multinational and biotechnology companies across the globe, in addition to the academic institutions and everything else.

So, with that context, what we've got is a lot of multinationals who have a great interest in China, particularly because you've got a country that's actively Westernizing. It's becoming much more interested in being more of a global player - interested in G8, interested in the OECD [Organization for Economic Cooperation and Development]. And it's 1.3 billion people who are gradually improving their standards of living and will be consumers.

This is obviously a great opportunity for the drug companies. It's a great opportunity because it's very much an unmet need. So, there's a lot of illnesses there that are not of great significance in the Western world because we've got them under control or they are easily treatable, but are not treated there just because of the stage of healthcare in China.

And as part of that opportunity, the Chinese government is, like most Western countries, offering incentives on pricing and formulary and listing and review for companies that develop the drugs in China for marketing in China.

So, we're out there responding to continual requests with a lot of these multinational companies, saying, 'Look, we're going out there, and we need the service.' So, as a global CRO, it's almost a no-brainer. You go where your clients are. …

They obviously are investing a significant amount in R&D centers, doing a lot of the research, the discovery, looking at transferring assets from the West to develop there, and us going there to be the first GLP-compliant preclinical CRO over there - we want to build the preclinical testing facilities so our clients don't have to.

PharmAsia News: Does the Shanghai facility remain on track to be operational by late this year?

Perkins: Yes, it's building now, and I was there in June. It was great because our criteria have been that you should be able to walk into that and think you're in a Western facility, in terms of the way it is constructed and the way the facility is laid out. And that's what we're seeing. We are just at the finishing stages now. We're getting the epoxy on the walls, putting in ceilings, plumbing for the HVAC system. So, yes, it's on track for Q4. We'll be operating and in business and talking to the animal laboratory care institutions, government, and we're talking to clients around Q4.

PharmAsia News: Can you talk about other opportunities for Charles River in China?

Perkins: We completed a joint venture last June with BioExplorer that has a small facility out there, which is doing discovery support. It was linked in with multinational pharmaceuticals, so that's why it was very attractive for us. So, that facility continues to operate. At the moment, it's all discovery support, and a lot of it is discussing with clients and tailoring to their needs so that as soon as we open they can start to transfer work into our new facility.

PharmAsia News: Traditionally, a lot of companies that wanted to move into China would start joint ventures with Chinese companies. Is that still the best way to go?

Perkins: I think it is the most effective way to do it. I'm sure it could be done the other way, but I think you'd need to bring in local knowledge because it's a developing country. This is not a capability they've had. It's a capability they want, so we've not found any resistance from the Chinese authorities. And they've made a lot of changes in import-export criteria. They've made the area where we are a special zone. So, they're very amenable to it, but it's still being able to talk to the right people and understanding the bureaucracy and the history.

PharmAsia News : How does that impact efforts to provide preclinical services?

Perkins: A good example is importing rats. We want to bring in gold-standard rodents from Japan because there are none in China. Yes, we will be starting to breed them later on, but when we first open, we need to bring them in from Japan. Well, nobody's ever really thought about bringing rats in from outside. So, the regulations are designed to keep rodents out, not to let them in. Now it's not an issue because we're able to talk to the government. But having a joint venture there with someone who is a Chinese national, who has Western experience and understands the issues just makes it so much smoother.

PharmAsia News: You mentioned that Charles River can help clients accelerate drug development. One area where multinationals express concern about China is the time it takes to receive clinical trial authorization from China's State FDA [Also see "Industry Should Encourage Clinical Trial Reform In China – Shanghai R&D Panel" - Scrip, 6 April, 2008.]. Can CROs in China help speed that process along?

Perkins: A lot of the delays with getting clinical trial approval are related to the work being done outside China. So, a lot of those delays disappear if the work is done internally. Some of the multinationals are already doing some of that work and submitting it to the Chinese FDA to get trials in place. I think a lot of it goes away just by being able to perform the work there to the standards that will both meet the Western and the Chinese regulatory requirements, and being on the ground and talking to them. We've been able to do that by setting up very close links with the FDA in Beijing and in Shanghai to facilitate inspections and acceptance of our data.

PharmAsia News: Are there any regulatory changes you would like to see in China that would make the country more attractive for CRO work?

Perkins: I think the changes are ongoing. I don't see anything that makes it unusually difficult to do. It's the same as if you go into any area that's new. If you haven't got resistance, then it's just a matter of going through the change and managing the change. I think the Chinese FDA is actually very keen on moving to the Western standards as quickly as possible. We've provided comparisons of their request for their GLP guidelines with the [U.S.] FDA GLP guidelines. They've asked us to give them talks and they are very open. I don't think they're resistant. They want to change, they're going to change, and they're going to do it an awful lot faster than I think even we imagine.

PharmAsia News: Do you think U.S. FDA's plans to open permanent offices in China will have much effect?

Perkins: Yes, I do, and I think it will be positive. It's something we welcome. From what discussions we've had with the Chinese FDA, I believe they would welcome it, because the FDA guidelines, the FDA GLP requirements, they know they've got to get there, and they want to get there. And having the presence of the FDA there will just accelerate it. What has taken us 30 years to do in the West, they're going to do in about three.

[Editor's note: This is part one of a two-part interview. Look for part two in an upcoming issue of PharmAsia News.]

Charles River Laboratories VP Christopher Perkins On Building Preclinical Facilities In China: An Interview With PharmAsia News (Part 1 of 2)

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