Expansion in the East

MPI Research forms joint venture with Medicilon in Shanghai

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SHANGHAI, China—In a joint venture that brings the best of both worlds together—inexpensive skilled labor in China, with 30 years of experience as a CRO—MPI Research and Shanghai Medicilon announced in mid-December a joint venture dubbed Medicilion-MPI Preclinical Research LLP. Expected to open early this year here, the new 50,000-square-foot facility will provide customers with important preclinical testing and development services, with an eye toward achieving GLP status in early 2009.

For privately held MPI, based in Mattawan, Mich., partnering with a CRO in China is the latest in a string of strategic moves as the company continues to broadly expand its service offerings for the pharmaceutical and biotech industries.

In July, the company expanded its preclinical capacity by more than 79,000 square feet, including the addition of 84 animal rooms, new surgical suites and accommodations for specialized infusion work. This follows more than $65 million worth of investment to expand toxicology capability and office space in 2006, as well as the acquisition of State College, Pa.-based preclinical lab Exygen Research in October 2006.

"With one-fourth of the world's population, China is an important force in shaping the global pharmaceutical and biotechnology markets," says William U. Parfet, MPI Research's chairman and CEO, in a press release announcing the deal. "We have carefully looked for more than three years to find a CRO partner that shares our values and commitment to excellence, and we have finally found one in Shanghai Medicilon"

For the folks at Medicilon, the time to strike was now as China, particularly Shanghai, is seeing large infusions of cash as companies of all stripes look to take advantage of the country's well-educated, relatively cheap labor pool to fuel pharma R&D.

As noted in the Dec. 19, 2007, edition of DDN Online, GSK recently announced its intention to invest $100 million for a new research facility in China in an effort to bolster its neuroscience portfolio. And earlier this month, showing the growing clout of the Chinese bio-pharma industry, Shanghai-base WuXi PharmaTech acquired cGMP certified CRO AppTec Laboratory Services Inc., St. Paul, Minn., for $151 million (see story Page 1).

Yet while the industry is taking off in China it is still lagging in some areas. "In terms of GLP in Shanghai, there is not very much competition right now," says Dr. Chun-Lin Chen, a co-founder of Medicilon who will serve as CEO of Medicilon-MPI Preclinical Research. "MPI has 30 years experience in GLP and they specialize in IND enabling work. Many big companies are looking for GLP-capability and we can attract highly cost-effective and experienced workers to provide those services by 2009."

As part of the joint venture, MPI is making an undisclosed investment in the joint venture, while Medicilon is providing the facilities and access to the labor pool through its existing company. In order to oversee the process of becoming a GLP facility, MPI will send a team of workers to Shanghai to spearhead the compliance process.

The plan is for the companies to be able to provide customers with a continuum of services, some delivered in Shanghai and others via MPI's expanded preclinical toxicology capabilities.
"We already work with 60 companies," says Chen. "We think many of them, which includes big pharma clients, will be eager to use our services once we can become GLP certified here in Shanghai."


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