In a further demonstration of the value of strategic outsourcing in R&D to a financially strapped pharmaceutical industry, US-based contract research organisation (CRO) PPD has acquired a 130,000 sq ft vaccine testing laboratory and related equipment in Wayne, Pennsylvania as part of a collaborative agreement with Merck & Co.

The deal involves PPD hiring the nearly 80 Merck employees who operate the Wayne facility and providing Merck with assay development and immunogenicity testing services to support the company’s vaccine portfolio over a five-year period.

PPD will also significantly expand its existing central laboratory service relationship with Merck, providing the latter with traditional central laboratory and sample storage services to back up the pharmaceutical giant’s clinical development activities over five years.

Financial details of the collaborative agreement were not disclosed. PPD said the acquisition of Merck’s vaccine testing facility gave a substantial boost to its global central laboratory business, adding world-class vaccine and biologic testing, assay development and sample storage capabilities to the CRO’s current suite of laboratory services.

PPD plans to invest in the acquired laboratory by developing new technologies and assays to expand its immunochemistry and oncology vaccine testing services as well as biologics laboratory services for other biopharmaceutical clients.

“We believe strategic outsourcing is key to the future of R&D and represents an innovative approach to the challenges facing our pharmaceutical and biotechnology clients,” commented Fred Eshelman, chief executive officer of PPD. “This collaboration with Merck represents a unique opportunity for us to acquire leading scientific talent and state-of-the-art facilities, expand an existing relationship with a long-time client and offer a new service line to other customers in the growing vaccine market.”

Last August, Eli Lilly struck an innovative R&D outsourcing deal with US-based CRO Covance that entailed the latter acquiring and operating Lilly’s Greenfield Laboratories facility in Indiana, US. The two companies also signed a 10-year service agreement worth $1.6 billion, building on an existing strategic collaboration whereby Covance conducted preclinical toxicology and early-stage clinical work for Lilly.