BIO OUTSOURCING ASIA

Biopharmaceutical Outsourcing Opportunities and Challenges

October 2009 VOL. 2 ISSUE 3

DuBiotech: Dubai’s Life Sciences Hub At the cross-roads of Asia, Europe and Africa

The Middle East’s Biotech Potential

A Global Strategy to Attract the

Best to Dubai

Spotlight on PAREXEL: Guiding Biopharmaceutical Companies through the Challenges of Entry into Asian Markets

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Bio Outsourcing Asia© TABLE OF CONTENTS

October 2009 Vol. 2 Issue 3

© CanBiotech Inc.

Formats: Online, Digital, and Print

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Feature Stories, Trends and Analysis,

Case Studies, Technology Profiles, Company Profiles,

News, Events

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UPCOMING ISSUE:

Opportunities in Asia Pacific

Contact the Editor at editor@canbiotech.com to

participate in this issue.

Spotlight on Dubai

DuBiotech-Dubai Biotechnology and Research Park

A Life Sciences Hub Page 4

Companies Located at DuBiotech

Page 5

DuBiotech’s Strategy to Attract the Best to Dubai Page 8

Perspective on Opportunities Across Asia From BioPlan Associates Inc.

The Middle East’s Biotech Potential

Faiz Kermani, PhD Page 10

Companies Continue Outsourcing

BioManufacturing: Singapore the Top Foreign Destination for

US Biomanufacturers Eric S. Langer

Page 13

Company Spotlight: PAREXEL

Guiding Biopharmaceutical Companies

through the Challenges of Entry into Asian Markets Page 17

UPCOMING BIOASIA EVENTS Page 4

BIOASIA INDUSTRY NEWS

Page 16

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DuBiotech-Dubai Biotechnology and Research Park-Life Sciences Hub Dubai Biotechnology and Research Park (DuBiotech), a member of TE-COM Investments was officially launched in February 2005 by His Highness Sheikh Mohammed bin Rashid Al Maktoum, as part of Dubai‘s 2010 vision to establish a knowledge-based economy. DuBiotech is a free-zone dedicated to the life sciences. The park accommodates the entire life sciences value chain by providing key facilities, investing in infrastructure, and creating a unique free zone that incorporates industrial, academic, commercial and resi-dential projects. The park includes the BIO headquarter towers, the Nucleotide Lab Complex and warehousing facilities to support research and development, manufac-turing, distribution, and other services. In addition to the park‘s facilities and infrastructure, DuBiotech also offers services such as regulatory affairs man-agement, partner development, registration and licensing, government ser-vices and leasing services. Beyond its infrastructure, DuBiotech is actively building alliances with distin-guished universities, specialist hospitals, world regulatory bodies and other research parks to link the DuBiotech community with the global life sciences industry. Keeping in line with its goal to be the major life science hub in the Middle East, DuBiotech includes companies such as Pfizer, Amgen, Merck Serono and Genzyme. DuBiotech offers these companies a unique business environment through a mixture of incentives such as advanced infrastructure, support services, free-dom of capital movement, tax-free income and easy access to different mar-kets. Companies operating within the DuBiotech community are offered a unique set of commercial benefits and incentives as a result of their free zone status. These include:

100% tax exemption. 100% repatriation of capital. Tax free salaries for all employees. 100% foreign ownership. Easy incorporation with minimal formalities. Guaranteed 30-50 years exemption from personal, income and

corporate taxes Long term land leases.

Phase 1 Spread over an area of 22 million Sq ft, DuBiotech‘s infrastructure com-prises the headquarter towers, the Nucleotide Lab Complex and the ware-housing facilities. DuBiotech collaborated in the initial phase with the rele-vant government bodies to establish the regulatory framework essential to facilitate biotechnological and pharmaceutical research in the region. The park further benchmarked its regulatory framework with international best practices to ensure that the correct business ecosystem was established. The first phase saw over 50 reputed international life sciences companies register with DuBiotech as business partners. Phase 2 Now in its second phase of development, DuBiotech continues to draw strong interest from the international community of life science companies. DuBiotech‘s purpose built, state-of-the-art infrastructure and distinguished community of international business partners, have earned the park the reputation of being the premier destination for life science companies. The second phase will specifically involve the relocation of the existing life sciences companies to the new DuBiotech headquarters and labs. Partner-ships have also been finalized with investors to execute additional develop-ments as per the master plan including laboratories, office building, residen-tial, hotels, retail areas, schools and other services. At completion, the direct investment of DuBiotech is estimated to be around $400 million excluding third party investments. During the second phase, DuBiotech will strengthen the partnerships with governmental bodies in key areas such as regulatory affairs and academic projects. Life Science Cluster Benefits DuBiotech offers an industrial cluster environment for life sciences compa-nies including:

Proximity to customers and suppliers–DuBiotech is geographi-

cally near to Middle East, Central Asia, Africa, the Asian Sub-continent and the Eastern Mediterranean. These regions have a population of over 2 billion people and a combined GDP of around US$ 7 trillion.

Strong regulatory frame work–Consulting services are pro-vided by the DuBiotech Regulatory & Science Affairs depart-ment.

Excellent networking opportunities in the hub. Single window services for licensing, visas—provided by the

Government Services Office. Commercial, residential, educational, and recreational facilities.

Located at the cross-roads of Asia, Europe and Africa, Dubai is well posi-tioned to attract tourists, businesspeople, and families looking for a modern,

safe and business centered destination. Du-bai‘s strategic location allows for easy accessi-bility; more than 135 airlines operate through the Dubai International Airport, linking it to 210 destinations worldwide with direct con-nections to the main global cities. As the ma-jor business and financial link between the East and the West an increasing number of

international businesses continue to base their regional operations in Dubai. The friendly policies of the Dubai Government and the superior infrastruc-ture facilities provide all the essential components for a successful business venture. Source: DuBiotech, www.dubiotech.ae.

Upcoming BioAsia Events

4th Annual Conference on Drug Discovery and Clinical Development in India: Scientific and Regulatory Advances Across Borders New Delhi, India 15/11/2009 - 18/11/2009

bioLOGIC India 2009 Grand Hyatt, Mumbai, India 01/12/2009 - 04/12/2009

MEDIFEST, Premier Medical & Healthcare Techno Trade Event Pragati Maidan, New Delhi, India 11/12/2009 - 13/12/2009

2nd International Conference on Drug Discovery & Therapy Dubai, UAE 01/02/2010 - 04/02/2010 Asia Pharma R&D Leaders 2010 Summit Intercontinental Hotel, Shanghai, China 04/03/2010 - 05/03/2010 BioMalaysia 2009 Kuala Lumpur Convention Centre, Malaysia 17/11/2009 - 19/11/2009 The 1st DIA Regulatory Communications Workshop in Japan Tokyo, Japan 26/11/2009 Partnerships in Clinical Trials Asia Pacific Singapore 01/12/2009 - 03/12/2009

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Companies Located at DuBiotech Al Zahrawi Group www.zahrawi.com Distributor of medical and laboratory equipment Alliance Global FZ-LLC www.alliance-agbl.com Distributor for medical diagnostics and life sciences industries Amgen (Middle East FZ-LLC) www.amgen.com Biotechnology company Aspen Healthcare LLC FZ www.aspenpharma.com Distributor of MNC and branded generics Biomedix FZ-LLC www.biomedixllc.com IVD kit and related chemical reagents producer BioPharma Middle East & Africa FZ-LLC www.biopharma-mea.com Specializes in biotechnology and pharmaceutical products Boston BioCapital FZ-LLC www.bostonbiocapital.com Venture capital firm Cryo-Save Arabia FZ-LLC www.cryo-save.com Collection, isolation, and storage of stem cells from umbilical cord blood Dimensions Healthcare FZ-LLC www.dimensions-healthcare.com Healthcare Consultancy Eastern Biotech & Life Sciences FZ-LLC www.easternbiotech.com Biotechnology company Eppendorf Middle East FZ-LLC www.eppendorf.ae Distributor of laboratory equipment and consumables Genzyme Middle East FZ-LLC www.genzyme.com Biotechnology company Getz Pharma International FZ-LLC www.getzpharma.com Specializes in pharmaceutical and biotechnology products Greenrain FZ-LLC www.greenrain.biz Developer of clinical decision support software Gulf Specialty Pharma FZ-LLC www.gulfspecialtypharma.com Markets novel oncology products and services in the gulf region Laboratoria Qualiphar www.qualiphar.com Family-owned pharmaceutical company

Laboratory Automation Services Middle East FZ-LLC www.tecan.com Laboratory automation services LifeCell International Private Limited www.lifecellinternational.com Private stem cell bank Maquet Middle East FZ-LLC www.maquet.ae Leader in medical systems Merck-Serono Middle East FZ-LLC www.merckserono.com Pharmaceutical and chemical company Natrol Global FZ-LLC www.natrol.com Subsidiary of Plethico Pharmaceuticals; Global healthcare/pharmaceutical company NeoBiocon FZ-LLC www.biocon.com New joint venture between Biocon Limited and Neopharma; Pro-vides specialty biopharmaceuticals NewBridge Pharmaceuticals FZ-LLC Nbpharma.com Specializes in providing innovative healthcare products; Regional partner Orla McLarney Consulting FZ-LLC www.omc-pharma.com Marketing services for the pharmaceutical industry Pfizer International Corporation www.pfizer.com Research-based biomedical and pharmaceutical company Pharma Plan Middle East FZ-LLC www.pharmaplanmde.com Healthcare management services Pharma Affair FZ LLC www.pharmaaffair.com Outsourcing research-based service provider PHILIPS Respironics www.philips.com/respironics Leaders in sleep and respiratory markets Richard Wolf Middle East www.richard-wolf.com Leader in medical endoscopy Viacentra FZ-LLC www.viacentra.com Medical supplies company Vins Life Science FZ-LLC www.vinsbio.in Developing country drug manufacturer

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DuBiotech’s Strategy to Attract the Best to Dubai Currently, the Dubai Biotechnology and Research Park (DuBiotech) is home to some of the world‘s top biopharmaceutical companies, including Amgen, Genzyme, Merck Serono, and Pfizer. Intellectual property legislations, the government‘s approach to clinical trials, and new drug registration proce-dures, have enabled DuBiotech to establish itself as a globally recognized centre for the life science industries. (Dubai Health and News, 2009) In 2006 for example, Amgen Inc. announced it would open its Mideast headquarters in a Dubai free trade zone developed to attract biotechnology research and development firms. Amgen was one of the first biotechnology companies to establish operations in the Middle East. This site focuses on selling cancer and arthritis drugs to an estimated 300,000 patients throughout the Middle East and Africa. Amgen also indicated that it could move some of its research and development work to Dubai in the future. Amgen was attracted to Dubai‘s business-friendly setting—including intellectual property protection, no taxes or restrictions on foreign ownership, expatriate employ-ees or sending profits outside the country. (Krane, 2006) Amgen‘s Dubai office acts as the regional hub for the Middle East, Africa and Turkey for commercial and medical activities, providing all functional and management support to the region including marketing, medical, finance, supply chain and regulatory affairs. (UAE, 2009) In 2009, a high-level meeting was held to discuss Amgen‘s future plans at the park and the potential of expanding regional presence. Rolf Hoffman, Senior Vice President Commercial Operations, Amgen International, expressed in-terest in clinical research, and developing clinical trials in collaboration with DuBiotech and local clinical research organizations (CROs). Amgen is also exploring the possibility of developing a logistics centre in DuBiotech that is connected to its main logistics platform in Europe to serve the entire Middle East and African markets from Dubai. (UAE, 2009) Dr. Marco Baccanti, Executive Director of DuBiotech stated, ―We feel privi-leged that the development strategy of DuBiotech is facilitating Amgen‘s re-gional expansion plans. The biotechnology cluster gains significance from the infrastructure point of view because of its laboratories, warehouses, and offices. Its cluster composition with the presence of pharmaceutical compa-nies, research institutions, CROs, and strong affiliations with the UAE Min-istry of Health and local health authorities, further serve as strong incentives for companies seeking a presence in the region…‖ (UAE, 2009) Ashraf Allam, Regional Managing Director of Amgen, said: ―Our goal is to become the best human therapeutics company in this part of the world. In an area with a population of over half billion people, there is immense po-tential for Amgen to serve a range of patients. We chose the park as an ideal location to accommodate the entire life sciences value chain. It provides key facilities and incorporates specially tailored amenities to support the rigorous requirements of research and development, manufacturing, distribution and high value-added services.‖ Similarly in 2006, Genzyme Corporation announced the official opening of its Middle East office based in Dubai. The new office established at DuBio-tech, expands Genzyme‘s global network to improve support for patients and the medical community in that region. (AmeInfo.com, 2006) The Dubai office specifically provides regional sales and marketing support to custom-ers and distributors for its enzyme replacement treatments for Gaucher, MPS I, Fabry and Pompe, and four Lysosomal Storage diseases. It also sup-ports activities for Renagel, a treatment to reduce the phosphorus levels in chronic kidney disease patients on hemodialysis, Thymoglobulin, an immu-nosuppressant for treating and preventing acute rejection in renal transplant patients, and Thyrogen, an adjunct to thyroid cancer disease management designed to aid in the treatment and earlier detection of recurrence. (AmeInfo.com, 2006) The Dubai office will represent Genzyme in Bahrain, Egypt, Iran, Iraq, Jor-dan, Kuwait, Lebanon, Libya, Malta, the Sultanate of Oman, the Kingdom of Saudi Arabia, the United Arab Emirates and Qatar. Further activities are an-ticipated in Yemen, Syria, and Sudan. (AmeInfo.com, 2006) Genzyme also anticipates adding staff for administrative, regulatory and customer service functions in the coming years. Ariaan Schipper, Genzyme‘s Regional Direc-tor for the Middle East from the Dubai office stated, ―We are looking for-ward to expanding our services in the area so we can build a closer relation-ship with our stakeholders and so more patients with serious medical needs can benefit from our specialized therapies‖. (AmeInfo.com, 2006) Jean-Michel Halfon, President and General Manager of Pfizer‘s Emerging Markets Business Unit, similarly met with high-ranking officials in the sum-mer of 2009 to discuss the expansion of their regional headquarters for

Africa and the Middle East, based at DuBiotech facilities. (Dubai Health and News, 2009) Since establishing its regional headquarters in DuBiotech, Pfizer has achieved measurable growth in Africa and the Middle East. Dr Marco Baccanti Executive Director of DuBiotech said, ―As the region's lead-ing life sciences cluster, DuBiotech will play a critical role in providing the right resources to support Pfizer in the region…We believe DuBiotech is rightly positioned to help companies such as Pfizer sustain their pioneering status at the forefront of biotechnology." Jean-Michel Halfon said, ―Pfizer feels privileged to have the support of a major corporation such as Dubai Holding and its entities to build our already well-established operations. A base at DuBiotech will facilitate our efforts in meeting our long term objectives.‖

DuBiotech is actively building affiliations and alliances with distin-guished universities, specialist hospitals, world regulatory bodies and other research parks to link the DuBio-tech community with the global Biotechnol-ogy industry. Compa-nies incorporated by the park or located within it are offered a set of commercial benefits and incentives as a result of their Free Zone status. (Wikipedia, 2009) The latest deal signals

the region‘s active pursuit of global partnerships including an agreement with the Swiss Biotech Association to promote collaboration between the two organisations. (AmeInfo.com, 2009) In addition to collaboration between the two biotechnology organisations, one of the initiatives under the agree-ment includes a campaign to raise awareness among the Swiss biotechnology and medical technology companies about the Middle East's growing health-care market and the benefits offered by DuBiotech as a life sciences free zone. (AmeInfo.com, 2009) Dr Marco Baccanti, Executive Director, DuBiotech said, ―Considering the strategic importance and the technology advancement of the Swiss biotech-nology and medical technology sectors, and the benefits the DuBiotech plat-form offers to these industries, the agreement is an ideal move to ensure mu-tual advantages to the UAE and Swiss biotechnology compa-nies." (AmeInfo.com, 2009) Domenico P. Alexakis, CEO of Swiss Biotech Association likewise ex-pressed, ―We are actively supporting all our 183 members to develop their business opportunities. With the collaboration between DuBiotech and the national industry association, the awareness level will increase and generate additional value for the industry.‖ (AmeInfo.com, 2009) The mixture of incentives that DuBiotech provides creates a unique business environment for companies to start operations at the park. Besides the tax free environment, DuBiotech has set up the necessary infrastructure for life science companies to conduct activities within the park including hazardous waste management, custom support services for logistics and distribution activities, and centralized facilities for research and development activities. (Wikipedia, 2009) References: 1. Amgen International Explores Expansion Plans With DuBiotech

UAE Today, August 22 2009. 2. Genzyme inaugurates Middle East office in Dubai,

www.AmeInfo.com, November 09 2006. 3. Krane, J. Pfizer's emerging markets president meets Dubai Holdings

officials to discuss regional strategy, San Francisco Chronicle, May 10 2006.

4. Pfizer‘s emerging markets president meets Dubai Holdings officials to discuss regional strategy, Dubai Health and News, June 16 2009.

5. Wikipedia, Accessed November 2009.

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The Middle East’s Biotech Potential Faiz Kermani, PhD Author of BioPlan Associate Inc.'s book A Quick Guide to Healthcare and Biotechnology in the Middle East: http://www.bioplanassociates.com/quickguides/QGME.htm

The attraction of the Middle East The Middle Eastern markets, along with North Africa, ac-count for only 2% of global pharmaceutical sales, but are of growing interest to multinational pharmaceutical companies.1

Analyses of the Middle Eastern markets by BioPlan Associates Inc. suggest that the total re-gional value is around US$10.6 billion. Traditionally, the Middle East has been low on the agenda of

pharmaceutical companies, due to reliance on strong growth in the US mar-ket and to a lesser extent in Europe and Japan. However, a slowdown in these markets is persuading companies to look further afield for growth prospects. With an estimated population of 280 million, which has been sug-gested to be one of the fastest growing in the world, and a rising demand for modern medicines, it is likely that most international companies will find re-gional commercial and R&D opportunities to suit them. Multinational companies which have previously dominated the Middle East through deals with regional agents are now making their presence felt through direct moves into the region. Continued investment by foreign com-panies will depend on improvements in the regulatory and intellectual prop-erty environment as well as a strong government line taken against counter-feiters, who continue to plague the regional market. Healthcare Historically, most governments in the region provided free health care to their citizens, with varying degrees of success in the quality they were able to offer. However, most countries are finding that they cannot meet the con-tinuing demand and are trying to involve the private sector. Demographic pressures alone will necessitate more expenditure. The World Bank has esti-mated that countries in the region might face 2% annual increases in health-care expenditure needs from the ageing of their populations.2 Across the re-gion there is also an increase in both communicable and non-communicable diseases. Rising demand has led to new opportunities for private companies to be-come involved in Middle Eastern health care. Israel has the highest per cap-ita spend on health care in the region and the government is facing pressure to continue financing its services at the rate it has achieved in the past. In countries such as Lebanon, the decline in the public system due to the civil war led to a greater reliance by the population on the private sector. In the Gulf States the private sector has been encouraged to become more involved in order to meet health care costs for expatriate workers. Liberalization measures in politically conservative countries such as Iran and Syria are also attracting private companies. The emergence of biotech Due to the changing disease profile, there is a growing demand in the Middle East for biotech products and this is reflected by the decisions of multina-tional companies to invest in the region. Aside from specialized biotech companies such as Amgen and Genzyme, many of the major pharmaceutical companies including Roche, Novartis, Pfizer and GlaxoSmithKline market biotech products in the Middle East. NovoNordisk, which specializes in dia-betes, has performed very well in the region due to the rise in the disease. Smaller biotech companies have also targeted the Middle East for growth. Generex Biotech has been using local consultants to aggressively source and evaluate prospective licensing opportunities in the region. It has even made inroads into markets such as Lebanon and Syria with its proprietary oral in-sulin spray product Generex Oral-lyn. Although individual companies in the Middle East are developing biotech products to try and emulate their foreign competitors, many governments wish to promote the development of a mainstream biotech industry. There are also regional efforts to foster cooperation between countries, such as the

Eastern Mediterranean Health Genomics and Biotechnology Network. To date, there has been mixed success in boosting biotech research. Many gov-ernments are extremely ambitious, with the desire to mirror the US model, but have simplistic expectations of how to kick-start a vibrant biotech sector. Even in Israel, where some biotech companies have successfully emerged, a number of start-ups have experienced funding problems and limited com-mercial interest in their technologies. Apart from Israel, Egypt and Iran appear to have promising biotech research environments. Egypt initiated its National Strategy for Genetic Engineering and Biotechnology in the early 1990s and has invested in research centers and pilot plants for scaling up manufacture of biotech products. Recently, Iran's Pasteur Institute launched a new complex to produce biotech products such as vaccines for hepatitis-B, and anemia drugs based on erythropoietin. One of the most impressive developments is Dubai Biotechnology and Re-search Park (DuBiotech), in the UAE, which is the world‘s first free zone dedicated to the life science industry. It has succeeded in attracting a number of major multinational companies to base themselves there but whether this investment strategy also leads to local biotech start-ups with a chance of suc-cess is not yet apparent. Saudi Arabia and Qatar are also fostering biotech research through investment in science parks with a view to emulating Du-Biotech. Outlook Health care is clearly an important priority for all governments in the Middle East, but they have had varying successes in meeting the needs of their populations. Demographics and disease trends are dictating that govern-ments develop new strategies to deal with additional demand. For pharmaceutical companies the health care trends create an ideal scenario for market entry. For those developing high-priced biotech products, al-though there is a downward pressure on pricing, it is unlikely to have the same intensity as in established markets, and so there is still a demand for these products. Many companies clearly see opportunities given their recent high profile moves into the region. Whether mature biotech sectors can emerge in the Middle Eastern remains to be seen. There are promising signs and no shortage of ambition in a number of countries, but drug develop-ment is an expensive and risky process and so only the most persistent will succeed.

Figure 1: The Middle East Pharmaceutical Markets

References: 1. Middle East North Africa pharmaceutical market - in transition. Man-

agement Forum. http://www.management-forum.co.uk/Filestore/white_papers/Middle%20East%20North%20Africa%20Pharma%20Market.pdf

2. Saleh WF (2008). Reforming Egypt's health system: is it that simple? BMJ 2006;333:859-860. http://www.bmj.com/cgi/content/full/333/7573/859-a

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Companies Continue Outsourcing BioManufacturing: Singapore the Top Foreign Destination for US Biomanufacturers By Eric S. Langer, President, BioPlan Associates The increase in outsourcing for all aspects of biologics is not likely to go away anytime soon. As J&J announced 8000 new layoffs in November, add-ing to the list of 100,000+ layoffs this year, Novartis was announcing its spending $1.3 billion on R&D centers in China. From an outsourcing per-spective, it isn‘t hard to connect the dots. As investment and capital available to the global bio and pharmaceutical markets slow, we‘ve seen decreased R&D and productivity. This has increased cost pressures, and, as a conse-quence, outsourcing is seen increasingly as a strategic alternative. In the company‘s annual industry report, the 6th Annual Report and Survey of Biopharmaceutical Manufacturing [1], we evaluate trends and the extent to which global manufacturers and vendors are being squeezed. Budget projections are an early indicator and our study attempts to quantify how these fears may translate to budget contractions. The results provide a global view from ex-ecutives at 446 biopharmaceutical manufacturers and contract manufacturing organizations. Companies providing outsourced services seem to be surviving the global financial crisis as the impact on drug manufacturers of the capital pinch trickles down. Many internal functions vital to survival are ‗outsource-able‘ and in some cases, these functions are being used to take up the slack where internal budgetary belt tightening has led to layoffs. Asian companies, which have been offering an impressive array of outsourcing services including manufacturing, discovery, R&D, IT and clinical development for the bio and pharma industries, have enjoyed more rapid growth as a result. Recent press reports by AstraZeneca indicate that it is planning to divert most manufacturing activities over the next 10 years to India and China. An-other Bangalore based company Kemwell, with a strategic alliance with Ger-man pharmaceutical firm Boehringer Ingelheim, has invested $50 million for a biopharmaceuticals manufacturing facility in Bangalore for the US and EU markets. Top Drivers for Outsourcing Drug innovators outsource manufacturing for a variety of reasons, typically based on company size, situation, and funding. Some reasons include:

Cost and competitive pressures. Lack of access to capital and funding. Lack of internal expertise (available staff). Urgency: Time-to-market (smaller companies). Lack of available capacity. Need for enabling technology (e.g. Expression systems, DSP).

In this year‘s annual industry report, we found the primary trends in out-sourcing included:

Slight declines in capacity utilization. Relatively stable outsourcing planning. Clients‘ increased expectations of their CMOs. Shifts in destinations for international outsourcing. Predictions of the causes of future capacity crunches.

Biopharmaceutical product developers are strategically outsourcing certain manufacturing and process development activities, which continue to feed growing demand for services. Drug manufacturers are increasingly consider-ing contract manufacturing and outsourced services more as an asset to drive strategic manufacturing decisions than as a simple capacity alternative. We are likely to see this trend continue as the biopharma services industry ma-tures, and risk-sharing, and partnering agreements between service suppliers and drug innovators grow. [2] Shifts in Destinations for International Outsourcing: Country selection for international outsourcing of biologics is shifting as the industry globalizes and matures. In this year‘s study we tested 20 global desti-nations where respondents in the US, and in Western Europe, respectively, might consider outsourcing. Figure 1 shows the percent of US respondents who indicated they might potentially outsource biomanufacturing to each of the 20 listed countries. Singapore was mentioned most often (with 36.5%), with Ireland, India, China and Germany in close proximity. Note that when we removed the ‗possible‘ option as a destination alterna-tive, and assessed only countries that US respondents rated as either a ―Strong likelihood‖ or a ―Likelihood‖, we found more conservative responses: Singa-pore (9.2%), Germany (5.7%) Ireland (4.3%), and the UK (3.5%) as out-

sourcing destinations.

Figure 1: Percent U.S. Respondents Considering Outsourcing Bio-

manufacturing at any Level of Interest (Possible, Likely or Very

Likely), by Country

Western European Based Respondents: Among Western European respondents (Figure 2), we find the following responses regarding possible destinations for their outsourcing activities. The US was indicated most frequently, with 59.2%, followed by Germany with 43.1% indicating it as at least a ‗possible‘ destination for outsourcing. Singapore was ranked fourth, after the UK. Figure 2: Percent Western European Respondents Considering Out-sourcing Biomanufacturing, by Countries

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Improving Relationships to Increase Outsourcing To achieve integrated partnerships, we are finding that outsourcing compa-nies are increasingly focusing on the need to establish long-term relation-ships with clients. This, of course, involves communication, relationship management and other soft skills that are sometimes under-developed in technology-based companies. Critical areas of concern remain, and growth in outsourcing will depend on how well service vendors create strong working environments with their clients. (Figure 3) The trends over the past 6 years have not changed significantly, and the factors of greatest concern continue to center on:

Establishing a good working relationship. Complying with quality standards. Respecting IP. Providing sufficient capacity. Being able to stick to a schedule.

Figure 3: Critical Issues When Considering Outsourcing Biopharma-ceutical Manufacturing to a CMO, 2008 (% Responding Very Impor-tant and Important)

Down-sides of Offshore Production and Development While offshore outsourcing can lower labour costs, it can also significantly increase project management, general management, rejection rates, logistics, and distribution costs. Unless done right, total costs can sometimes equal or exceed the savings from the lower labour costs. Asian outsourcing, especially to India and China, has changed over the past five years. According to James Bingham, Ph.D., Senior Director, Development at Amplimmune (Rockville, MD), ―India is a viable choice for large scale manufacturing if you have the right partnerships and contractual relationships but generally not always for smaller scale.‖ Bingham believes there has been a shift in how clients now view Asian service suppliers, ―Many thought that outsourced manufacturing would go to Asia based on lower cost. I don‘t see that happening. China, specifically, has changed tremendously over the last few years and is really showing an effort to be technically competitive. Singapore and India had a head start but China is catching up and has surpassed some countries in bio-pharmaceuticals manufacturing.‖ Singapore is the most advanced, and, ac-cording to Bingham, ―they sometimes get overlooked but are very serious about biopharmaceuticals.‖

Price and Labour Parity: The lower labour and facilities costs for small molecule manufacturing have been evident in both India and China. However, for biopharmaceuticals the high facilities and capital costs, along with the required high level of technical and operational exper-tise, means that there is less saving on labour. In India, for example, employee costs rise with the increase in education and skill.

IP Situation: Intellectual property issues continue to be a concern in both

India and China, and many legal councillors recommend caution when manufacturing there. While many very significant changes are being undertaken in both countries to address IP concerns, the time-frame for ensuring full compliance with international regulations is still a bit in the future.

Quality Manufacturing: The risks and costs in outsourced pharma manufac-

turing go far beyond simple lot failures. So both China and India are addressing issues of control, sourcing and quality management in small molecules, and safety issues related to raw materials, intermedi-ates, and APIs. Because the cost of managing quality operations is a significant percentage of the overall costs of manufacturing, compa-nies must provide full time resources in these areas.

Regulatory factors and trends: China‘s SFDA has made great strides toward

achieving international parity for regulatory functions, even as regula-tory concerns have risen as a result of highly publicized adverse events there.

India Trends and Opportunities India‘s biopharma sector continues to expand, even with the current eco-nomic slowdown. Because India has a jump-start on other Asian manufac-turers, this growth will likely benefit Indian providers of outsourced pharma-ceutical services first. The Indian biopharmaceutical industry has never been considered a strong product innovator; however, process innovation was mas-tered and capitalized on decades ago. Our recent manufacturing study, Top 60 Biopharmaceutical Manufacturers in India [3], describes a number of Indian companies that provide cost efficient production and manufacturing of re-combinant drugs. India‘s biopharma industry is managing to do quite well on the strength of contract research plus local and regional sales of insulins and other off-patent, big-market biologics. Some activities in Indian outsourcing from our monthly India biopharma newsletter include:

AZ to divert all mfg to India/China in 10 years. Kemwell & BI, invest $50 million for US/EU mkts. Contract mfg core services shifting East. India‘s API manufacturing: $1.1 billion. Indian process innovation mastered years ago. India has 175 US-FDA approved plants. Biopharma outsourcing large slices of R&D. Clinical research growing, ~$300 million 2008. Indian biogenerics sold in ME/Africa/Asia.

China Trends and Opportunities The current global economic situation has pushed some of China‘s key manufacturing indexes to record lows; yet Western economists are still pro-jecting positive annual growth rate. Some of this growth will come from in-vestments and growth in China‘s biopharmaceutical sector. Recent collabo-rations and investments in China‘s biotech industry represent a sustainable growth trend, despite retreating global investments. According to BioPlan Associates‘ analysis of the biopharmaceutical manufacturing sector, Directory of Top 60 Biopharmaceutical Manufacturing Organizations in China [3], investment and growth in this emerging industry segment will outstrip both global and Chinese manufacturing sector expansion. Our China biopharma newsletters [4] indicate advances over just the past few months alone:

Novartis to invest $1.3 billion in China R&D facilities. Genzyme R&D center - $100 MIL R&D. Lonza facility - PD & cGMP mfg, 70 scientists. AZ to expand mfg plant in Wuxi-US$220mil. Pfizer goes lower tier in China-constructive partner. Bioton $2Bil in insulin distrib w/ Bayer AG in China. Novartis China Univ est‘d – w Peking Univ, Harvard, etc. GSK partners with Shenzhen Neptunus on flu vaccine. Roche app research center in Shanghai. GSK to expand vaccine business- launches two new products. J&J opens R&D center in Shanghai. Abbott HUYA Bioscience strategic alliance. Novo Nordisk to invest US$400 million for insulin manufacturing. Genzyme Corp. to build R&D center in Beijing US$90 million.

According to Dr Lei SUN, president of manufacturing, at AutekBio, Inc. (Beijing & San Diego, CA), one of the only CMOs established in China, ―Over the past 5 years, the trend toward outsourcing in China has continued to grow steadily. Although China‘s biologics contract manufacturing industry is still at a relatively early stage, there is increasing interest in preclinical scale and pilot scale manufacturing.‖ Outsourcing Planning Many small and mid-tier biopharmaceutical innovators are experiencing the impacts of the global financial crisis in their inability to access capital for manufacturing expansions. This is playing a role in how companies are defin-ing their outsourcing strategies. For example, this year, we found that over a quarter of biopharmaceutical companies (26.3%) indicated that, “Lack of fi-nancing for production expansion” was a primary cause of future capacity con-straints. Despite these expectations of future constraints, the financial situation has not yet substantially shifted existing outsourcing. This year, among respon-dents producing in mammalian cell culture, 52.5% indicated they performed all their production ―in-house‖ (virtually the same percentage as last year, see Figure 4). While 12.5% of respondents outsourced less than10% of their

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production, 6.3% outsourced between 90-100%. Over the past few years, the percentage of biotherapeutic developers who are doing all their mammalian cell production ―in-house‖ shifted downward slightly from 57.6% in 2005 to 52.5% today.

Figure 4: Biopharmaceutical Manufacturing Facilities Outsourcing No Production, 100% In House

Outsourcing is holding steady on all fronts, regardless of production system. Again, the split between traditional and newer systems appears in the lower percentages for traditional systems. It is likely that the newer systems will be increasingly outsourced as the industry gains experience and confidence in working with CMOs with these expression systems. Outsourcing „Some‟ Production: Figure 5 shows the percentage of facilities that indicated they will outsource ―at least some production‖ in 5 years (by 2013). In general, for all systems, the projection for outsourcing has declined. This is reversing a trend toward greater outsourcing in recent years. Likely, a re-sult of economic pressures, this year, 53.5% of respondents projected that at least some production in mammalian cell culture will be outsourced in 5 years, compared with 60.4% last year making that same 5-year prediction. Similarly, 43.9% of respondents this year indicated that at least some of their microbial fermentation will be outsourced within 5 years. This compares to 47.6% of biotherapeutic developers last year who gave their 5-year projec-tions. Figure 5: Five-Year Projections; Percent Biotherapeutic Developers Planning to Outsource at Least Some Production in 5 Years

Trends in Selecting a CMO In this year‘s study, we evaluated 19 critical issues concerning outsourcing of biopharmaceutical manufacturing to a CMO. Some of these are shown in Figure 6. Client-relationship issues are becoming increasingly critical with, “establish a good working relationship” topping the list this year and 93.3% indi-cating the issue was either ‗Important‘ or ‗Very important‘. This year some of the top considerations rated as ‗Very important‘ included:

Establish a good working relationship (62.5% indicating factor ‗Very important‘).

Comply with my company‘s quality standards (58.7%). Protect intellectual property (55.8%). Have capacity enough to meet my sales demand (52.9%). Stick to a schedule (52.9%).

Effectively handle cross-contamination issues (51.9%). Offer a secure supply (Control of capacity) (47.1%). Have regulatory compliance expertise (47.1%).

Figure 6: Outsourcing Issues: BioManufacturing by CMO

Vendors in the industry, in areas such as customer service, and client-vendor relationships are increasing. It is possible that this factor was undervalued in earlier days when the industry was less experienced with CMOs. It may be that the industry is maturing in its outlook and has finally come to fully ap-preciate the importance of ‗culture fit‘ and client-relationships. CMO expertise is arguably the most valuable aspect of what vendors have to offer. As biomanufacturing increases in complexity, CMOs find it necessary to build on their specific expertise, their IP, cell lines or other service differ-entiators. Biologics CMOs today are increasingly recognizing that simply having capacity isn‘t enough to ensure success. Because CMOs recognize they cannot provide all services to all clients, they are differentiating them-selves based on expertise in areas such as upstream process development, downstream purification, fill-finish, or in handling unique production plat-forms. Summary The global biopharmaceutical industry is facing challenges to current opera-tion models. Most are seeking cost-effective ways to conduct R&D and manufacturing. Outsourcing is increasingly seen as an acceptable alternative to address operational needs, improve efficiency, and offer greater flexibility. China and India in particular have rapidly grown in status in the global phar-maceutical outsourcing area. Each offers a different set of services, skills, cost savings, and quality. The global financial crisis has worked to heighten the visibility of Asian outsourcing. Chinese companies have been developing vaccines for decades, and have strong R&D and manufacturing capabilities in these areas, similar to that in India. Because India has focused more on small molecule drug R&D, and China has developed its biotechnology capabilities, China has been more attractive from a technology and infrastructure perspective, especially regard-ing biotech products. Asian pharma outsourcing industries have grown rapidly, especially in recent years. And while they remain relatively small, generally considered to be

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around 2% of the global pharma outsourcing market, they are growing rap-idly. We expect that as both China and India expand their capabilities, they will be able to provide quality GMP services that will support a global bio-pharma strategy. About the Author: Eric S. Langer is president at BioPlan Associates, Inc., a biotechnology and life sciences marketing research and publishing firm established in Rockville, MD in 1989. He is editor of “Advances in Large-scale Biopharmaceutical Manufacturing, 2nd Ed”, and pub-lisher of numerous studies, directories, and reports on India and China. elanger@bioplanassociates.com 301-921-5979. www.bioplanassociates.com References: 1. 6th Annual Report and Survey of Biopharmaceutical Manufacturing

and Scale-up Production, BioPlan Associates, Inc, Rockville, MD April 2009.

2. Zhou, YB, Directory of Top 60 Biopharmaceutical Manufacturing Or-ganizations in China, BioPlan Associates, Inc. April 2008.

3. Directory of Top 60 Biopharmaceutical Manufacturing Organizations in China BioPlan Associates, Rockville, MD 2008.

4. BioPlan Associates, Inc. China and India Biopharma Newsletters (available at www.bioplanassociates.com).

Survey Methodology: This sixth in the series of annual evaluations by Bio-Plan Associates, Inc. yields a composite view and trend analysis from 446 responsible individuals at biopharmaceutical manufacturers and contract manufacturing organizations (CMOs) in 35 countries. The methodology also encompassed an additional 140 direct suppliers of materials, services and equipment to this industry. This year's survey covers such issues as: current capacity, future capacity constraints, expansions, use of disposables, trends and budgets in disposables, trends in downstream purification, quality man-agement and control, hiring issues, employment and training. The quantita-tive trend analysis provides details and comparisons of production by bio-therapeutic develops and CMOs. It also evaluates trends over time, and as-sesses differences in the world's major markets in the US and Europe.

BioAsia Industry News Novartis to invest $1B in R&D in China, buy vaccine firm Novartis plans to invest $1 billion in the next five years in research and de-velopment in China to take advantage of planned health care reform in the country. The Swiss drugmaker also is buying an 85% stake in Zhejiang Tianyuan Bio-Pharmaceutical, a vaccine company, for $125 million. The acquisition is part of Novartis' strategic initiative to build a vaccines in-dustry leader in China and expand its limited presence in this booming mar-ket segment, the Swiss group said. Source: Reuters, November 4 2009. Global firms in Race for Indian Pharma and Biotech Companies International drug manufacturers look to acquire major players in the Indian drug market. GSK looks to a phased buy-in for Dr Reddy's Laboratories, and to obtain over 20% stake. Dr Reddy's will be able to explore various growth opportunities if it collaborates with GSK. Sanofi-Aventis has control of Shantha Biotechnics and Pfizer received licensing deals with Aurobindo Pharma and Claris Life Sciences. Other companies looking for a foreign deal include Wockhardt and Piramal. Source: Reuters News, Oct 08, 2009. PPD to Acquire Excel PharmaStudies – Acquisition will significantly expand PPD’s presence in China PPD, Inc. recently announced it has entered into an agreement to acquire Excel PharmaStudies, Inc., the market leader and one of the largest contract research organizations in China, providing PPD additional capacity and ex-pertise in this rapidly growing market. It also significantly increases its em-ployee and client base in Asia Pacific. The acquisition strengthens PPD‘s ability to offer Phase II–IV clinical, data management, biostatistics, regulatory and quality assurance services under a variety of operating models, ranging from functional to full service. Combin-ing its drug development expertise with its global central laboratory opera-tions in Beijing and Singapore uniquely positions PPD to deliver a broad set of services to biopharmaceutical companies in China, Japan and throughout the region. Excel will operate as a wholly-owned subsidiary of PPD. Source: PPD

BioMalaysia – Accelerating Commercialization in Biotechnology Themed ―Accelerating Commercialization in Biotechnology‖, BioMalaysia 2009 The conference will feature three tracks on healthcare, agriculture and indus-trial biotechnology and is expected to receive 8,000 participants from over 30 countries, 1,200 local and international conference delegates, and 60 very prominent subject matter experts. The BioMalaysia Exhibition will feature more than 200 local and interna-tional exhibitors. Among the exhibitors include BioNexus companies, minis-tries, government agencies, embassies, trade missions, universities, research institutions and financiers. BioMalaysia 2009 will also showcase product demonstrations and business partnering sessions. BioMalaysia 2009 is anticipated to surpass the success of BioMalaysia 2008, in offering strategic experiences and resources that could take Malaysia closer to achieve scientific and business objectives in biotechnology. Source: BiotechCorp, Corporate Affairs Division Kollodis BioSciences, Inc. Enters Into Japanese Distribution Agree-ment With Funakoshi Co., Ltd. Kollodis BioSciences, Inc. announced recently that it has entered into a Dis-tribution Agreement with Funakoshi Co., Ltd. for the distribution of Kol-lodis BioSciences, Inc.'s MAPTrix® ECM line of products for cell culture and related applications. The non-exclusive agreement provides Funakoshi with the rights to distribute Kollodis‘ cell culture products in Japan. Kollodis BioSciences, Inc. has successfully developed a proprietary recombi-nant protein expression system for the large scale production of various mussel adhesive proteins (MAP). Kollodis is developing MAP-based smart biomaterials for biotech, medical and industrial applications. The Company's proprietary and patented MAPTrix® platform technology recombinantly incorporates bioactive peptides into a mussel adhesive protein (MAP) for cell culture and related applications. Additional information is available on the Company's website at www.kollodis.com. Source: Kollodis BioSciences, Inc. DuBiotech Opens Doors to First Phase of National Reference Lab, a Mubadala Healthcare Initiative DuBiotech recently opened its doors to the National Reference Lab (NRL), a Mubadala Healthcare initiative for providing reference laboratory services to public and private hospitals as well as clinics across the UAE and the re-gion. The 12,000-square-foot laboratory, which will become operational later this year, will occupy the entire ground floor area in one of the four wings at the new Nucleotide Complex, the technology-intensive laboratory building in the life sciences cluster. The National Reference Lab has been created in partnership with Laboratory Corporation of America Holdings (LabCorp), one of the world‘s largest and most experienced clinical laboratory companies. As part of its long-term ob-jectives, it aims to increase the spectrum, coverage and overall efficiency of laboratory testing in the region, implement international best practice refer-ence laboratory processes, and set a new benchmark for quality standards in the region. Source: DuBiotech.ae Goa Industry Director Urges for Revised Biotech Policy With changes in biotech industry, Goa's Industry Directory states policy to attract more investors should be revised. The director proposes the estab-lishment of a new committee, comprised of experts from Goa University, National Institute of Oceanography, and other renowned institutes, to revise the policies. The Department of Industries also plans to establish a biotech incubator in Goa in partnership. Source: The Times of India News, Oct 23, 2009 Bharat Biotech with Orissa Govt. initiates Konark Knowledge Park Bharat Biotech International and Government of Orissa signed a public-private partnership project to build Konark Knowledge Park with an invest-ment of $21.32 MIL USD. The project aims to boost biotech and pharma investments in Orissa. Orissa Govt. allocated 64.86 acres, 30 acres for Phase I and remaining acres for Phase II. The park would accelerate growth of bio-tech, pharma and IT entrepreneurship and help to strengthen science and technology based R&D. Source: IndiaPRwire News, Oct 26, 2009

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PAREXEL: Guiding Biopharmaceutical Companies through the Challenges of Entry into Asian Markets An Interview with Albert Liou, Corporate Vice President and General Manager, Asia/Pacific Region, PAREXEL International

An Overview Over the past 27 years, PAREXEL International has developed significant expertise to assist clients in the worldwide pharmaceutical, biotechnology and medical device industries with the development and launch of their products. Headquartered near Boston, Massachusetts, PAREXEL has over 9,130 employees and operates in 70 locations throughout 52 countries around the world spanning the Americas, Europe, the Middle East, Africa, and the Asia/Pacific region. In Asia, PAREXEL has offices in Japan, India, China, Indonesia, Malaysia, Singapore, South Korea, Taiwan, and Thailand, and has approximately 1,500 employees throughout the region. Leveraging PAREXEL‘s global footprint, its regulatory and operations ex-perts are focused on meeting customer needs for worldwide market access to develop and deliver safe and effective treatments for patients. The Company offers a broad range of services—from strategy to commercialization—to the biopharmaceutical industry, providing a unique combination of clinical development experience, integrated technologies, and global access to pro-vide results for ever more complex global programs. With extensive experi-ence in biopharmaceutical product development and regulatory affairs, PAR-EXEL assists clients to accelerate the transition following drug discovery to proof-of-concept through to late phase clinical development. Partnering with client senior management further provides the opportunity to integrate prod-uct lifecycle management strategy with business objectives, with a focus on addressing key time and cost challenges through more effective outsourcing, while achieving more efficient development and commercialization of im-portant new drugs and devices. As an innovator in defining strategic partnerships in the biopharmaceutical industry for over two decades, PAREXEL utilizes a spectrum of relationship models to meet the diverse requirements of its customers. Especially for small and medium companies requiring deep experience and broad global capabilities for biopharmaceutical and medical device development and com-mercialization, PAREXEL provides insightful strategic guidance to develop products with the right quality standards for the right patient populations, and helps these companies manage successful interactions with regulatory agencies to meet key milestones. PAREXEL has in-depth expertise across a broad range of therapeutic areas, including demonstrated therapeutic expertise in several areas that mirror the biopharmaceutical pipeline such as Cardiovascular, CNS, Infectious Disease, and Oncology. In these areas in particular, PAREXEL offers broad study experience and direct knowledge of study requirements, risk management, and best practice implementation. With experienced and dedicated global therapeutic area teams, PAREXEL helps clients with every aspect of clinical development, applying a therapeutically focused expertise methodology to programs and offering effective study design and management services, multi-service integration, and an efficient process that reduces delays. Opportunities and Challenges in the Asian Market With 15 locations throughout the Asia/Pacific region, PAREXEL also helps clients address key challenges in conducting studies in the Asia/Pacific re-gion and globally, including accessing diverse patient populations, navigating regulatory issues, identifying investigators, and ensuring data quality. The Asia/Pacific region is becoming an increasingly attractive location for global clinical development activities. There are numerous factors driving this trend, including a shortage of trial volunteers in Europe and North America, the sophisticated healthcare systems in many Asian countries, and the avail-ability of highly trained medical professionals in the region. Equally impor-tant, Asia is the fastest growing pharmaceutical market in the world, provid-ing significant opportunities for drug development and marketing. Asian countries such as Japan, South Korea, and Taiwan continue to attempt to leverage the living and healthcare standards through reforms and foreign-assisted projects, and are pursuing parallel efforts in refining their regulations on drug and medical development— making Asia a competitive landscape to conduct clinical trials. With the fifth largest pharmaceutical market in the world ($25B USD), China specifically is now a prime region for biopharmaceutical companies. The im-mense market potential and the fact that on average clinical trials cost ap-proximately 40%-60% less to conduct in the region have provided an ideal

setting in which biopharmaceutical organizations can establish an R&D pres-ence. But with new opportunities come new challenges—primarily receiving approvals from China‘s State Food & Drug Administration (SFDA). Despite the market growth the country has seen, the SFDA has struggled to keep up in terms of adequate resources and the needed experience to conduct re-views in a timely manner. To overcome these hurdles in China, biopharmaceutical companies are lev-eraging the support and expertise of clinical research organizations (CROs) for counsel with product strategy and development. By working with CRO partners, organizations are able to provide more accurate evidence to sup-port drug applications in a shorter timeframe. The result is increased safety and faster time-to-trial. Ultimately, this benefits the people who are in most in need of newer, safer drugs. Albert Liou, Corporate Vice President and General Manager, Asia/Pacific Region, PAREXEL International, is a recognized expert and industry vision-ary in these issues. An interview with Albert Liou revealed the challenges facing biopharmaceutical organizations as they chart their way into the Asian markets. In this interview, Mr. Liou discusses how PAREXEL has grown its presence in the Asia/Pacific region to establish a strong foothold and a broad range of capabilities focused on guiding biopharmaceutical companies through market entry. Achieving True Globalization: A CRO Industry Case Study Today, Albert Liou advises biopharmaceutical companies to take a cautious approach to entry into the Asian market given its broad geography, vast cul-tural, as well as language differences. This advice is based on years of in-depth experience and knowledge of the Asian market. PAREXEL first en-tered the Japanese market in 1995, with a vision to expand its presence in the Asia/Pacific region to serve the evolving needs of its clients. A key milestone in that vision was achieved in 2007 when PAREXEL an-nounced the successful completion of the acquisition of Taiwan-based Apex International Clinical Research Co., Ltd. The acquisition strengthened PAR-EXEL‘s global and regional capabilities, providing clients with a wide range of clinical research service offerings throughout the Asia/Pacific region, in-cluding mainland China, Hong Kong, India, Taiwan, Singapore, Indonesia, South Korea, Malaysia, Thailand, the Philippines, New Zealand, and Austra-lia. The acquisition was based on an approach PAREXEL employed to first de-velop a strategic alliance with Apex, a leading regional CRO, in order to ex-pand services into the market. Four years prior to the acquisition, PAR-EXEL had purchased a minority interest in Apex after conducting a consid-erable amount of due diligence to ensure that the company‘s programs and standards met PAREXEL‘s rigorous quality guidelines. During this time, Apex established a strong track record of success, carrying out numerous clinical studies with PAREXEL. At the time of the acquisition, Josef von Rickenbach, Chairman and Chief Executive Officer of PAREXEL International, stated: ―The Asia/Pacific region has become increasingly important and attractive for a wide range of clinical development activities.‖ Several factors are continuing to drive client demand for clinical research services in the Asia/Pacific region including established and sophisticated healthcare systems in many countries, the avail-ability of highly trained professionals, and attractive end markets for bio-pharmaceutical products.‖ The acquisition of Apex has been of great strategic value for PAREXEL, and combined with the Company‘s previously long-term presence in Japan, India, and Australia, PAREXEL has become a formidable competitor and one of the leading providers of biopharmaceutical services in the Asia/Pacific region. PAREXEL‘s long-term alliance with Apex and subsequent acquisition reinforced the Company‘s commitment to providing high quality clinical development services in the Asia/Pacific region. By fully integrating Apex into PAREXEL‘s global operations, the Company has continued to enhance its ability to help clients more quickly achieve their goals of bringing important therapies to patients not only in the Asia/Pacific region, but also throughout the rest of the world.

According to Albert Liou, Apex‘s diverse client base greatly benefitted from the combination with PAREXEL, which has provided a broader global scope and the ability to offer a wider array of capabilities for clinical pro-grams. PAREXEL now provides deep experience in clinical development and extensive knowledge of medical and clinical development practices and approaches that are specific to the Asia/Pacific region.

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An Eye on the Future Keeping an eye on the future Albert Liou also advises biopharmaceutical companies to take an optimistic outlook on opportunities in Asia/Pacific. With regulatory reforms by the ICH on the horizon, it is anticipated that clinical submissions will become much easier (including the possibility of common points in regulatory submissions and one large pivotal study con-ducted across Asian markets) resulting in early market access. Liou states that with the top four Asian markets including Japan, China, In-dia, and Korea providing a market potential of over $130 billion—greater than the top five European biopharmaceutical markets including Germany, France, the U.K., Italy, and Spain, the opportunities are too great to ignore. While it was once considered appropriate to first submit to the U.S. and U.K. regulatory authorities with Asian submissions second tier, today, with ICH regulatory changes, Japanese regulatory authorities now accept global data. It is expected that all Asian countries can eventually be included in global studies with tremendous cost and time reductions. Interestingly, in November 2008, PAREXEL announced that was among the first to conduct a Chinese bridging study outside of China. The Chinese bridging study was conducted at PAREXEL‘s dedicated research unit in Los Angeles, California—providing access to large number of first generation Asian populations, including 500,000 Chinese, as well as 600,000 Korean and 40,000 Japanese people. This type of study is intended to support biophar-maceutical companies that currently face challenges in conducting early phase studies in certain countries within the Asia/Pacific region, such as China. Phase I clinical data that are gathered in the U.S. can be used for sub-sequent global trials that include China, or for Chinese registration. PAR-EXEL‘s Asian bridging studies also provide clients with options for parallel development in Western and Asia/Pacific geographies. In addition to the Chinese bridging study, PAREXEL has completed Korean and Japanese bridging studies. PAREXEL itself will continue with its expansion of resources and capabili-ties into Asian markets including expanded use of the eClinical Suite from its technology subsidiary Perceptive Informatics, to help facilitate trials in Asia. This combination of PAREXEL‘s clinical and technology expertise is fo-

cused on help customers achieve greater benefits through faster execution.. Perceptive‘s eClinical Suite, which provides customers with the industry‘s most integrated solution, is a dramatic shift in the way technologies can be used to streamline workflow while facilitating effective trial management. Prior to the introduction of this new level of technology convergence, in Au-gust of 2008, PAREXEL announced the successful closing of the acquisition of ClinPhone plc—a leading clinical technology organization. By combining ClinPhone with Perceptive Informatics, Perceptive is now one of the indus-try‘s largest eClinical technology providers. Following the acquisition, Per-ceptive Informatics further expanded its technology integration and imple-mentation services—assisting biopharmaceutical companies to implement clinical trial process improvements, extend existing applications, and enable knowledge sharing across multiple systems. PAREXEL believes that this continued commitment to technology innova-tion will enhance support of its customers development objectives in Asia and throughout the world. Sources: 1. PAREXEL Closes the Acquisition of Clinphone—Combined Capa-

bilities Creates the Industry‘s Largest eClinical Technology Offering, August 14 2008.

2. PAREXEL Expands Pioneering Asian Ethnobridging Expertise, No-vember 6, 2008.

3. PAREXEL International Completes Acquisition of Apex International Clinical Research Co. Ltd., September 26 2007.

4. PAREXEL Newsletter, July 2008. www.parexel.com, Accessed October 2009.

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