US-based contract research organisation (CRO) Charles River Laboratories International has signed a joint-venture agreement with Shanghai BioExplorer Co., a Chinese supplier of preclinical services to the pharmaceutical industry.
The planned venture, Charles River Labratories Preclinical Services, marks the first phase of a strategy to expand the US company’s “global footprint” in the rapidly growing Asian market, Charles River noted. The transaction, which is subject to the usual conditions including regulatory approval in China, will create a joint venture majority owned and controlled by Charles River. The deal is expected to close by the end of the second quarter. Charles River declined to say how much it was investing in the initiative.
As part of the agreement, the company will construct a 50,000sq ft preclinical services facility in Shanghai, scheduled to open in mid-2008. It will provide a wide range of discovery and development services, including Good Laboratory Practice (GLP)-level and non-GLP toxicology studies. These services will meet the US Food and Drug Administration’s and Charles River’s standards for quality, as well as the US company’s “stringent animal welfare policies”, it said. Charles River intends to use its own research models in the Shanghai facility, “which the Company believes will enhance the quality of the studies performed there”.
Charles River’s stated aim is to be “the leading global contract research organisation to provide preclinical services in China that are compliant with international standards”. It also intends to remain the strategic partner of choice to “fully support customers’ global needs from drug discovery through proof of concept” as pharmaceutical and biotechnology companies step up their presence in the wider Asian market.
The US company has been refocusing its energies on the earlier stages of drug development after a sally into fully fledged clinical research services, spearheaded by the US$1.5 billion acquisition of Inveresk in 2004, came to a sticky end last year with Charles River’s decision to hived off its Phase II-IV clinical operations to Kendle International. The US CRO kept a foothold in clinical pharmacology studies, however, and last November boosted its capacity in this field with the US$29.5 million purchase of privately held Northwest Kinetics.
Preclinical services were the main driver behind the 6.5% sales growth, to US$1.06 billion, reported by Charles River for the 12 months to 30 December 2006. Preclinical sales climbed by 10.9% to US$543.4 million while sales of research models and services gained just 2.4% to US$515.0 million.