Firm Launches Cut-Rate Research Service

CONTRACT CHEMISTRY

While some U.S.-based providers of pharmaceutical chemistry research services are ceding business to low-cost newcomers from China and India, Cambridge Major Laboratories has decided to tackle the competition head-on.

The Wisconsin-based fine chemicals company is launching a new business called BudgetFTE that it says will provide "full-time equivalent" chemistry services at a price midway between what is charged by U.S. and Asian firms.

According to Brian W. Scanlan, Cambridge Major's vice president of corporate development, BudgetFTE will accomplish this feat by staffing its business with industrial postdocs—chemists and other scientists who have completed their Ph.D.s and want postdoc experience in an industrial setting.

ACS's latest survey found that the median annual starting salary for chemistry Ph.D.s in industry last fall was $77,000 (C&EN, Aug. 7, page 57), whereas Scanlan says the typical Midwestern industrial postdoc earns about $40,000 per year. Moreover, BudgetFTE will be based in an unused Cambridge Major facility that has been renovated to accommodate small-scale custom synthesis.

These savings will allow BudgetFTE to charge its customers $120,000 to $150,000 per chemist per year, versus $200,000 or more at a typical U.S. firm and around $60,000 at an Indian or Chinese firm, Scanlan says. He adds that the BudgetFTE staff will be supervised by seasoned Cambridge Major managers.

The business will start with 10 Ph.D. scientists and focus on FTE contracts that last six months to one year. Services will include synthesis of drug analogs, scaffolds, small libraries, and competitor's compounds. As BudgetFTE customers identify lead molecules, Cambridge Major hopes to offer them its traditional services in process development and production scale-up.