GVK inks a deep biotech deal as it rebuilds its reputation

India's GVK BioSciences, marred by a data scandal, has signed an exclusive deal with Swedish drug developer Medivir ($MVIR), agreeing to handle the bulk of the biotech's chemistry work.

GVK CEO Manni Kantipudi

Medivir, focused on infectious diseases, is moving all of its outsourced synthetic chemistry to GVK's India research campus, and the CRO is hiring about 20 new scientists to handle the workload. The plan, according to Medivir, is to cut R&D costs but preserve its drug discovery operation, and turning to GVK allows it to do just that, the company said. In the process, Medivir plans to cut about 10 internal jobs.

Meanwhile, GVK is working to repair its reputation after a data-falsification scandal tied to one of its facilities led European regulators to recommend the suspension of more than 700 approved products. The ensuing fallout has made life difficult for GVK, costing the company millions of dollars in cancellations and lost contracts, CEO Manni Kantipudi has said.

But, through months of back and forth with the European Medicines Agency, the CRO has maintained that its global R&D services are reliable. And the latest partnership is an affirmation of GVK's value as a collaborator, Kantipudi said.

"Medivir chose GVK Bio over several other CROs on the basis of its scientific strength and its ability to perform integrated research with chemistry and biology," the CEO said in a statement. "We look forward to delivering significant value to Medivir shareholders and to a productive partnership."

Before running into trouble with European authorities, GVK had been rapidly expanding its operations throughout and beyond India. The fast-growing company has quickly transitioned from a local player into an international entity, making its way into the U.S. through a buyout of California's Aragen Bioscience earlier this year. Among the CRO's partners are Astellas, Bayer, Endo Health Solutions ($ENDP), Onconova ($ONTX) and the FDA.

- read the statement (PDF)