Committing to India

As big pharmaceutical companies look outside their walls for chemistry research assistance, there appears to be a growing comfort with the talent and cost-effectiveness offered by Indian firms. A major alliance formed earlier this year between Wyeth and Hyderabad-based GVK Bio underscores this emerging faith in the capabilities of Indian contract research organizations (CROs).

The well-documented gaps in the pharmaceutical industry's pipeline have recently driven many firms to seek outside help with drug discovery and development. "The bottleneck in pharmaceutical development is always chemistry and following up on new projects," says Magid Abou-Gharbia, senior vice president for chemical and screening sciences at Wyeth Research (and a member of C&EN's Advisory Board).

As such, for the past three years, Wyeth has supplemented its internal R&D through contract chemistry research alliances with Albany Molecular Research and Milan-based NiKem Research.

At the same time, Wyeth set out in 2004 to establish a comprehensive outsourcing strategy, an effort that involved assessing which chemistry and screening activities could be better carried out externally.

The company's search for a new contract research partner began with a list of 90 companies around the globe. Abou-Gharbia, along with colleagues from Wyeth's exploratory chemistry and discovery strategy groups, methodically winnowed those companies to a short list of firms that they visited. From that pool, Wyeth conducted pilot studies at a handful of CROs in Russia, China, and India.

The homestretch came last July, when Wyeth formed a team that included members of several discovery functions to devise a request for proposals (RFP) to be sent to companies on the short list. The RFP specifically defined the needs, expectations, and operational requirements of the proposed alliance. An evaluation of the RFPs submitted by proposed partners yielded a final list of companies, all of which ended up being in China or India, Abou-Gharbia notes. Wyeth then visited the labs and talked to the scientists and leadership of each firm.

The intensive search concluded in January, when Wyeth signed a long-term research partnership with GVK Bio. The pact, the largest of its kind between a major drug company and an Indian CRO, calls for the construction of a dedicated R&D facility on GVK Bio's site in Hyderabad that will house 150 synthetic chemists.

GVK Bio came out on top for several reasons, Abou-Gharbia says. Clearly, the winner needed to have state-of-the-art infrastructure, strong synthetic chemistry capabilities, and the ability to quickly ramp up to meet Wyeth's needs. Cost was another critical factor. Though some of the competing CROs displayed comparable capabilities, they were much more expensive, he adds. Also, senior leadership of the Indian CRO displayed a "can-do" attitude and an entrepreneurial spirit that gave it an additional edge, Abou-Gharbia says.

Another asset is that GVK Bio is part of a larger parent company, GVK Group, that is both stable and committed to investing in chemistry outsourcing. This is an important attribute when trying to attract and keep top scientific talent in India, says Narendra Mallakunta, GVK Bio's vice president of business development.

The companies are moving full steam ahead. The first phase of the alliance, bringing on 30 chemists, has already been completed. Another 45 chemists are expected to be hired by July. The goal is to have the full 150 scientists in place by the end of the year. All of the chemists will be hired by GVK Bio, but Wyeth will have a hand in the training of some of the staff to ensure that quality and standards at the Indian site match those at Wyeth's own R&D facilities.

According to Abou-Gharbia, there are several ways to assess the success of the venture. The early test will be the CRO's ability to meet project deadlines for hiring and training chemists and building the R&D facility.

But the obvious long-term measure will be the effect the project has on Wyeth's internal drug discovery efforts. "With 150 chemists, we should set the place on fire," Abou-Gharbia says. But, he cautions, this is a new experiment, and it will take time to realize its full potential.

Wyeth has a corporate goal of putting 15 compounds into the clinic each year, and small molecules generally make up about 80% of its development pipeline, Abou-Gharbia points out. Key metrics will be the speed at which GVK can turn leads into discovery projects and the CRO's impact on ongoing projects at Wyeth.

For GVK Bio, a relatively young company on the contract research scene, the alliance is a major validation. The firm was launched in 2001 to provide bioinformatics services; medicinal chemistry and preclinical development services were added in 2002. Over the past five years, GVK Bio has grown to 1,000 employees.

"The CRO model is pretty new in India," Narendra says. "We have qualified and capable people, but they need to be trained in the nuances of confidentiality, intellectual property protection, and timelines." He believes that GVK Bio's success is due in part to ongoing internal training programs in the "dos and don'ts" of the CRO business.

In broader terms, the alliance is a significant milestone for the Indian CRO industry, according to Nailesh Bhatt, managing director of the consulting firm Proximare. Western drug companies, both large and small, are actively aligning in India, but he says Wyeth's decision to situate 150 chemists there signals comfort with planting deeper roots in the country. "I don't think this is the last of these deals," Bhatt notes. "I am aware of four other deals in the works between other pharma companies and CROs in India."