PRINCETON, N.J. and SHANGHAI, China, June 24 WuXi PharmaTech (NYSE: WX) and Covance Inc. (NYSE: CVD) today announced thatthe two companies have entered into a Memorandum of Understanding to create a50-50 joint venture which will provide world-class preclinical contractresearch services in China. Operations of the proposed joint venture will belocated in a 323,450 square-foot, purpose-built facility in Suzhou, China,which is currently being constructed by WuXi. This state-of-the-art facility,expected to be completed in 2009 and designed to meet the United States Foodand Drug Administration and worldwide regulatory standards, will provide GLPtoxicology, drug metabolism and bioanalytical chemistry services. In additionto the facility, which will be provided by WuXi, Covance anticipates to makean initial investment of approximately $30 million. Financial and structuraldetails of the joint venture are expected to be disclosed once definitiveterms are agreed and the entity is officially formed later this year.
"This joint venture will create a powerful partnership between China'sleading provider of discovery and development services with the world'slargest public contract research organization," said Joe Herring, Covancechairman and chief executive officer. "Covance and WuXi share a commoncommitment to quality, people, and building client relationships based ontrust and performance. Covance's market-leading and high-quality preclinicaloperations, combined with WuXi's track record of delivering world-class drugdiscovery and development services, will enable us to provide superior drugdevelopment solutions to our global pharmaceutical and biotech clients in theregion."
"We are pleased to partner with Covance, one of the world's largest andmost comprehensive drug development service companies," said Dr. Ge Li,Chairman and Chief Executive Officer of WuXi PharmaTech. "We will be able toimmediately leverage Covance's world-class expertise and global network. Thiswill allow us to accelerate bringing a full-range of preclinical services andGLP toxicology capabilities to this facility. The partnership is important toour mission of building a global R&D outsourcing service platform that willultimately help our partners to improve the success of discovery and shortenthe time of development."
China is becoming increasingly attractive for delivering high qualityoutsourced discovery and development services. Many multinationalpharmaceutical, biotechnology and medical device companies have alreadyestablished presence in China in order to access its rapidly expandinghealthcare market; tap into its large patient population for global trials;and take advantage of its huge talent pool for outsourced R&D work. As aresult, the preclinical service market in China is expected to grow rapidly inthe coming years. The joint venture between WuXi PharmaTech and Covance willallow customers of both companies to fully leverage the advantages ofconducting preclinical research and development in China, and potentiallysubmit global and domestic regulatory applications.
About WuXi PharmaTech
WuXi PharmaTech is a leading pharmaceutical, biotechnology and medicaldevice R&D outsourcing company, with operations in China and the UnitedStates. As a research-driven and customer-focused company, WuXi PharmaTechprovides pharmaceutical, biotechnology and medical device companies a broadand integrated portfolio of laboratory and manufacturing services throughoutthe drug and medical device R&D process. WuXi PharmaTech's services aredesigned to assist its global partners in shortening the cycle time andlowering the cost of drug and medical device R&D. For more information, pleasevisit: http://www.wuxipharmatech.com .
Covance, with headquarters in Princeton, New Jersey, is one of the world'slargest and most comprehensive drug development serv