WuXi (pronounced Woo-See) Pharmatech, a contract research organization (CRO) based in China, announced the acquisition of MN-based Apptec Laboratory Services. WuXi acquired Apptec to gain an immediate US footprint, better access to the US market, and important biologics expertise to expand outside the world of small molecules. This biologics expertise includes Apptec’s cell therapy bioproduction business which they were aggressively moving in to.

These two fast growing companies may be a match made in heaven in the rapidly evolving world of globalization. Apptec has a blazing compounded annual revenue growth rate of 46%, and WuXi acquired them for $151 million US. While Apptec has been around for over 20 years, WuXi was founded in December of 2000, and is the leading China-based pharmaceutical and biotechnology R&D outsourcing company that already has a market capitalization of over $1.8 billion US. WuXi boasts that their management team “consists of Western-trained Ph.D.s and MBAs with experience in drug R&D methodologies and Western-style business practices.” They are successful enough to have 9 of the top 10 drug companies (by revenue) as clients. Interestingly, WuXi has straightforwardly addressed the intellectual property concerns that typically comes with working with Chinese companies by establishing strict documentation and security procedures that are “rigorously enforced to protect partners’ confidential and proprietary information.” It is very likely that all of these attributes, from management to a commitment to quality to addressing IP concerns, have contributed to their rapid growth and success in only 7 years as an operating company. In order to maintain such rapid growth, many companies are looking to the emerging cell therapy market. I wonder how much of Apptec’s exposure to cell therapy drove this acquisition.

I am very interested to see if WuXi follows through on Apptec’s initial plans for aggressively pursuing the emerging cell therapy markets as seriously as Lonza has done with their Cambrex acquisition last year. If so, the expertise obtained via the Apptec purchase will bring important skills and know-how into China, and this can have lasting impacts on the global regenerative medicine landscape.