What is the current business environment for analytical testing services?
There is strong competition given the challenging economic environment. Pharmaceutical companies are continuing to restructure, which is increasing the volatility of the environment in terms of reprioritizations, delayed studies and slow decisions-making. Also, speed and cost are increasingly becoming more significant factors in outsourcing decisions, which has forced analytical testing providers like PPD to work more flexibly and efficiently to adapt to our clients’ changing requirements.
We are also seeing increased competition as companies outsource to fewer providers in an attempt to reduce costs and streamline their outsourcing functions. Pharma and biotech companies are transforming their relationships with outsourcing providers into more strategic, longerterm partnerships.
In addition, the analytical testing business is facing tougher competition from emerging markets like China, India and Eastern Europe where the costs of doing business is considerably lower than in the United States.
Considering today’s challenging business climate, are you seeing strong demand in the areas of analytical testing and cGMP lab services?
Demand for analytical testing and cGMP services has grown as the downsizing of biopharmaceutical companies continues to create holes in internal resources and capabilities. These companies are driven to move non-core capabilities such as analytical testing to external providers in search of cheaper, faster and more flexible options for their drug development program.
PPD has expanded our analytical testing and global laboratory services and has strategically positioned itself in anticipation of renewed growth in the outsourcing market. We have seen early indications that outsourcing is on the growth curve again, which wasn’t the case a year ago. Now that mergers and acquisitions between pharmaceutical and biotech companies are nearing completion of their restructuring, and as the economy gradually recovers, we are confident that the outsourcing market will pick up even more.
Why did PPD expand its cGMP operations into Athlone, Ireland?
Establishing the laboratory and supply facility in Ireland allows us to better serve our growing client base in Europe and the Middle East. It enables us to partner closely with our clients to deliver strong scientific and technical expertise across a broad range of highly customized services. The location also allows PPD to continue partnering with companies looking to market products in Europe as the Athlone location satisfies the European regulation that requires release testing at a European-based analytical lab.
In addition, Ireland offers an exceptionally business-friendly climate, highly skilled workforce, a fairly large presence of global pharmaceutical and biotech operations, and strong support from IDA Ireland, all important factors to ensure the successful future and growth of our business.
You also expanded your cGMP facilities in Wayne, Pa., last year. What were the reasons behind that decision?
PPD expanded services in North America to increase our ability to serve clients in the northeastern United States more effectively and to allow more flexibility for resources for onsite staffing programs at client sites. Our new Wayne lab is a 5,000-square-foot facility with significant space for expansion and provides small and large molecule testing for a full range of product development programs. Co-located with PPD’s vaccines and biologics laboratory, we can also be a single provider of laboratory services for companies working in vaccine or biologics development as we offer exceptional scientific expertise, more streamlined project management and easier logistics. Located within driving distance of our clients’ contract laboratories, the Wayne facility enables PPD to offer clients in the northeastern United States the benefits of proximity such as closer study oversight and ease of sample shipment.
How do the services offered at PPD’s laboratories in Athlone and Wayne compare to the long-established laboratory in Middleton, Wis.?
Our Athlone facility offers fully integrated solutions for product development and analytical development, including analytical testing services in method development; validation; and stability, release and quality control testing for small and large molecules and global clinical supplies, including secondary packaging, labeling and storage. The Athlone facility also provides regulatory services, product licensing and marketed product support, including qualified person (QP) services for all drug dosage forms The initial service offerings focus on small molecule testing services, including inhalation products as we wanted to further develop our competitive edge in inhalation testing by expanding these services into Europe.
The Wayne facility provides small and large molecule testing for a full range of therapeutic programs including vaccines and biologics. The Wayne cGMP laboratory also shares a facility with PPD’s Vaccines and Biologics laboratory, which was a first-in-kind comprehensive network of integrated, world-class laboratory services for vaccine and biologic drug development that PPD recently established. This close proximity has enabled us to leverage the expertise of vaccines and biologics colleagues for specialized vaccines testing.
PPD offers comprehensive analytical testing support, including small and large molecules for all phases of drug development at its 180,000-squarefoot cGMP lab in Middleton, Wis.
Do these two laboratories strengthen PPD’s global cGMP laboratory services?
PPD’s expansion into Europe with the Athlone facility has strengthened the global reach of our laboratory services, enhancing our ability to offer a convenient location suited to our clients’ specific needs, such as regulatory drivers, more efficient project oversight and streamlined communication.
Our Wayne laboratory is located in close proximity to our strong client base in the northeastern United States and allows us to serve these clients more effectively.
Another advantage of having two additional labs is that work can be shifted to these facilities when there are capacity constraints at the laboratory in Middleton, when appropriate. This flexibility has proven to be a significant benefit for our clients.
What is the benefit of having multiple cGMP laboratories in today’s business climate?
Flexibility, efficiency and cost have become increasingly critical to our clients. Having their contract laboratory nearby can create significant time savings and reduce the amount clients spend on travel, sample shipment and other logistics. In addition, it can enhance our interaction with clients, program management and communication, resulting in efficiency gains.