PPD Acquires China-based CRO Excel To Continue Global Expansion

SHANGHAI - The global contract research organization PPD has signed an agreement to acquire Excel PharmaStudies, a leading CRO in China, to upgrade its research capability across Asia, the company announced Oct. 27.

"Excel has significant experience navigating China's regulatory environment by working with the SFDA," said PDA spokeswoman Sue Ann Pentecost. "Because Excel is one of the leading CROs in China, Excel will also help PPD strengthen its reach in this country and provide us with additional capability to expand our presence in Asia Pacific."

"As our clients expand their global studies in China, Japan and throughout Asia Pacific, we are positioning ourselves to be the provider of choice in this region," Pentecost explained.

"We continue to evaluate strategic acquisitions that provide us with new capabilities to position us as the industry leader in this region," the spokeswoman added.

In September, PPD opened a global central laboratory in Singapore, which extends its range of customized services for biopharmaceutical clients in Southeast Asia (Also see "Global CRO PPD Expands Asian Presence With New Singapore Facility" - Scrip, 29 Sep, 2009.).

Last year, the company signed a deal with Peking Union Lawke Biomedical Development to open PPD's first Asia central laboratory in Beijing (Also see "U.S.-Based PPD Inks Deal With Peking Biomedical, Expands Lab Services" - Scrip, 8 Feb, 2008.).

"Combining this business with our current clinical services in China and our global central lab capabilities provided through our partnership with Peking Union Lawke will bring tremendous value to PPD and our clients," David L. Grange, the company's chief executive officer, told investors and analysts during an Oct. 28 earnings call.

"Through this acquisition, PPD will significantly strengthen its position in the Chinese drug development market and create a solid foundation for future growth in the Asia-Pacific region," Grange said.

"Upon completion of this acquisition, PPD will employ approximately 750 professionals in 12 countries throughout Asia-Pacific and we will continue to evaluate strategic opportunities to position PPD as the industry leader in this high-growth region," the CEO added.

Founded in 2000, Beijing-based Excel, which provides Phase II-IV clinical services in China, has become one of the largest CROs in China with over 370 employees and operations in 19 cities across China including a vaccine research center and biometrics center Taizhou, a pharmaceutical city in eastern China.

"Taizhou is the hometown of the current Chinese president and is positioning itself to become the country's largest pharmaceutical, biotech and medical equipment development zone in China. We're confident this acquisition will be accretive," William J. Sharbaugh, PPD's chief operating officer, said during the third quarter earnings call.

"The Excel acquisition will put us in the lead in terms of size for clinical development," said PPD Executive Chairman Fred N. Eshelman during the call.

"Excel also has an arrangement on vaccines, which we hope to fold into our overall strategy of being the dominant player in that development area," Eshelman added.

Excel's CEO William Xiong and Chairman and Founder Mark Engel, said in a letter to their clients: "The new company, Excel PharmaStudies, a division of PPD, will grow on its existing structure and with its existing core team in order to ensure the continuity of both our development and our service. In addition, PPD will use its comprehensive resources and experience to improve Excel's systems, facilities, and staff competence. All of this progress will advance Excel's abilities to serve our clients and to continue to grow."

After the acquisition closes, Excel's Engel is slated to work with PPD as a strategic consultant (Also see "Excel PharmaStudies Chairman Mark Engel On China’s Rapidly Expanding Clinical Trials: An Interview With PharmAsia News (Part 1 of 2)" - Scrip, 30 Jun, 2008.) .

While the Excel acquisition is expected to be closed this quarter, PPD also announced a strategic alliance with, and $100 million investment in, Celtic Therapeutic, and a planned spinout of its compound development unit (Also see "PPD To Spin Out Compound Partnering Unit And Invest In Celtic Pharmaceutical" - Pink Sheet, 28 Oct, 2009.)).

Set up in Maryland in 1985, PPD has rapidly expanded since then through a series of acquisitions, while its range of services has broadened to include not only drug discovery, but also clinical information software, medical information and post-approval services.

Since the turn of the century, PPD has moved into biomarker discovery sciences and global central labs, with operations that are now spread across six continents.

- Dai Jialing ([email protected])