Just as fellow US-based contract research organisation (CRO) Charles River Laboratories was taking a big step into the Chinese market with its US$1.6 billion acquisition of WuXi PharmaTech, PPD was making a less spectacular but by no means insignificant move by opening a clinical research centre for vaccines in Taizhou.

The new centre in Taizhou China Medical City, which will offer clinical monitoring services to global and local biopharmaceutical companies looking to develop vaccines in the fast-growing Chinese market, does actually build on an acquisition made by PPD last year.

In November, the recession-hit CRO announced a raft of initiatives designed to unlock value in its operations and step up its presence in the Asia Pacific region. These included acquiring market-leading CRO Excel PharmaStudies in China for an undisclosed sum. Among Excel’s assets were a vaccines research centre and a biometrics centre, both located in Taizhou.

Only weeks after that, PPD snapped up BioDuro LLC, a drug discovery outsourcing company with a 110,000 sq ft state-of-the-art laboratory in Beijing. PPD says it is now the largest CRO in China, with a total staff of nearly 1,100.

The company initially opened a Chinese office in Beijing in 2003. Five years later, PPD expanded its global central laboratories network into China through an exclusive agreement with Peking Union Lawke Biomedical Development Limited.

Unique requirements

The new centre will help companies to address the “unique” requirements for clinical trials with vaccines in China, PPD noted. Vaccine studies are conducted by the Chinese Centre for Disease Control and Prevention, instead of in Phase I clinics or by investigators in hospitals. Thousands of patients have to be enrolled for the trials, compared with hundreds in other countries.

On the other hand, PPD added, China has a short recruitment period for vaccine studies. And the country’s clinical trial market is growing at around 20% a year, according to Simon Britton, PPD’s vice president of clinical development for the Asia Pacific region.

China Medical City has become a national hub for international and domestic pharmaceutical, biomedical and biotechnology companies, PPD pointed out. It is part of a long-term plan to promote Taizhou as a global leader in research and development.

Vaccines are also one of the fastest-growing categories in the pharmaceutical industry. Last month, PPD said it was launching a centre of excellence for vaccines and biologics in the US, leveraging the CRO’s collaborative relationship with Merck & Co for vaccine testing and assay development.

The PPD Vaccines & Biologics Center of Excellence is in Wayne, Pennsylvania, where PPD acquired a 130,000 sq ft vaccine testing laboratory and related equipment in January 2009 as part of an agreement with Merck.

Licences for Irish facility

Another piece of good news for PPD is the award of manufacturer licences for its recently opened contract research facility in Athlone, Ireland, which includes an 18,000sq ft analytical testing laboratory and a clinical supplies business.

PPD declared the US$19 million facility officially open in early March. At that point, the Irish Medicines Board (IMB) had assessed the company’s applications for manufacturer licences to support both investigational and marketed medicinal products, as well as laboratory certifications for quality control of medicines, and had inspected PPD’s quality systems and premises at Athlone.

The CRO now has IMB licences for investigational medicinal products and marketed products at the site, as well as the necessary laboratory certifications for quality control. The laboratory will “provide a full range of small- and large-molecule testing capabilities, including inhaled products, allowing us to meet the changing needs of our clients more efficiently and effectively”, PPD said.

First-quarter results

The CRO’s operating income dived 60.8% year on year to US$25.3 million in the first quarter ended 31 March 2010. Diluted earnings per share were US$0.14 compared with US$0.38 in the first quarter of 2009.

Net revenues for the latest quarter were 4.8% lower at US$346.8 million. However, they beat the US$323.8 million consensus forecast in an analyst poll by Thomson Reuters. PPD also highlighted a sequential increase of 30% in gross authorisations for the first quarter, which came to US$607.1 million.

“During the first quarter, request for proposal activity improved, cancellations and adjustments decreased to a normal level, and we continued to make strategic investments to strengthen our business models and global infrastructure,” commented David Grange, chief executive officer of PPD.

“Our leadership team is fully aligned, and we are committed to pursuing our strategic initiatives to create long-term value for our shareholders,” he added.