WuXi snags a stateside CRO to beef up its early-stage services

WuXi PharmaTech CEO Ge Li

Chinese CRO WuXi PharmaTech ($WX) has bought out XenoBiotic Laboratories, a U.S. contractor focused on early-phase research, expanding its North American presence and broadening its lab-based business.

XenoBiotic focuses on bioanalytical and drug metabolism and pharmacokinetic (DMPK) services, with a roster of clients in pharma, animal health and agrochemicals. The company employs about 150 people through research hubs in Plainsboro, NJ, and a Chinese offshoot in Nanjing.

For WuXi, the deal is an opportunity to expand its laboratory testing division, adding new capabilities in radio-labeled compounds and building on its existing competence in DMPK testing. Furthermore, with XenoBiotic CEO Jinn Wu coming aboard to serve as chief scientific officer of WuXi's lab testing operation, the acquisition provides a platform from which to grow in the space, WuXi CEO Ge Li said.

"Dr. Wu has spent the past 27 years building a solid organization and reputation within the industry," Li said. "This business combination is an important step in WuXi's development of a comprehensive, integrated platform of R&D services to help our customers discover and develop drugs more efficiently and cost-effectively."

The company isn't disclosing financial details on the deal, saying only that it expects to see an earnings benefit by 2015.

WuXi, China's largest CRO, has been steadily growing its share of the global R&D market thanks to escalating demand for its discovery services and a broad-based expansion of its manufacturing platform. Last quarter, sales grew about 15% to $163.4 million, driven by 13.2% growth in lab services and a 19.3% jump in manufacturing.

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