BEIJING - The chief executive officer of Shanghai-headquartered WuXi PharmaTech, Ge Li, said that a planned merger with Massachusetts-based contract research organization Charles River could help spark a "revolution" in early-stage drug research in China.

Ge Li, who founded WuXi PharmaTech in the year 2000 and has since helped foster a Big Bang-like expansion of China's life science sector, said during an exclusive interview with PharmAsia News that the planned union with Charles River "will fast-forward globalization of pharmaceutical research and development in China."

"This transformational deal," he said, "will be good for both the United States and China."

The board of directors of Wuxi PharmaTech, along with the board of Charles River, has already approved the proposed $1.6 billion combination, which would provide a platform allowing innovative drug developers to conduct preclinical studies across the Northern Hemisphere (Also see "Charles River To Merge With Leading Chinese Drug CRO WuXi PharmaTech If $1.6 Billion Transaction Is Approved By Beijing's Antitrust Czars" - Scrip, 26 April, 2010.).

The Next Frontier For Drug Development

Charles River CEO Jim Foster told investors and analysts during a conference call earlier this week: "The combination of Charles River's expertise in in vivo biology and WuXi's expertise in chemistry creates a partnership capable of supporting clients' early-stage drug development efforts as no other CRO can, and of providing that expertise whether a client chooses to work in North America, Europe, China, or any combination of the three locales."

"No other CRO offers this range of expertise from molecule creation to first-in-human testing," Foster added. "Partnering with the leading CRO in China gives us an immediate significant presence in what is considered by our clients to be the next frontier for drug development."

Ge Li said during an extensive interview that the combined outfits would provide "for U.S. clients one-stop services in China."

"Charles River will bring many new capabilities to China, which will push forward research here," added Ge Li, who has a doctorate in organic chemistry from Columbia University.

Leading Star In China's Constellation Of Life Science Firms

Over the last decade, Li has become a leading star in the constellation of life science firms in China, and has constantly expanded WuXi PharmaTech's portfolio of contract research services, in part through the 2008 acquisition of the American pharmaceutical and biologics testing outfit AppTec Laboratory Services.

At the same time, Charles River has made forays into the Chinese market via the earlier takeover of a Shanghai CRO and the launch last year of a toxicology lab (Also see "Charles River-WuXi PharmaTech Deal Transforms China's CRO Landscape" - Scrip, 28 April, 2010.).

Yet Foster acknowledged this week that "Charles River's China revenue in 2009 was quite small."

Still, he suggested the lure of China's burgeoning market and pool of scientists is irresistible: "China is the new frontier for drug development. Global pharmaceutical companies are looking to take advantage of the opportunity to reduce cost while leveraging China's highly skilled scientists."

China is on track to become, Foster forecast, "the next research and development powerhouse which many believe will ultimately be second only to North America."

Meanwhile, Ge Li predicted that the alliance of the two research organizations "will fast-forward what WuXi wants to achieve by a few years."

The combined research expertise of the two firms, he said, "is laying the foundation for future R&D in China."

"From a high-level point of view," Ge Li added, "the more drugs the industry can discover, the more lives that can be saved."

With the union of WuXi PharmaTech and Charles River, and similar fusions of scientific talent in the future, he added, "the responsibility to save lives is definitely being globalized."

Until now, "most drugs have been discovered in the United States," said the founder of WuXi PharmaTech.

Innovation Has No Boundaries

Yet as the tides of globalization in the life sciences strengthen, Ge Li said, it will emerge that "innovation has no boundaries."

"People don't mind where drugs are discovered - whether in Japan, Australia, Canada or China," he added.

Meanwhile, if the merger goes through, Ge Li and two other WuXi PharmaTech leaders will be appointed to Charles River's expanded 13-person board of directors.

Li will also be named corporate executive vice president and president of global discovery and China services at the merged company.

Ge Li said he has no intention of cashing out of WuXi PharmaTech following the merger: "I will stay on for the foreseeable future."

"I am not selling the company, but finding a partner," he explained.

The proposed merger between Charles River and Wuxi PharmaTech, set to be finalized by the fourth quarter of this year, is subject to shareholder approval at each company.

Jeff Leng, a member of the WuXi PharmaTech board of directors, in an interview called the merger a "strategic deal that has support from major WuXi insititutional shareholders."

Leng, who is also managing director of $15-billion investment firm General Atlantic, one of WuXi PharmaTech's largest institutional investors, added that GA shareholders would back the combination.

"The merger," he said, "will really position China as a leader in this area of research."

At the same time, he added, "the global trend in R&D outsourcing is moving toward China."

- Kevin Holden (k.platt@elsevier.com)

WuXi PharmaTech Founder Ge Li Says Upcoming Merger With Charles River Is Part Of Globalization Of The Drive To Save Lives

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