Volume 88 Issue 28 | p. 8 | News of The Week
Issue Date: July 12, 2010

Pharma Outsourcing Aptuit Will Buy GlaxoSmithKline’s Italian R&D Labs

Department: Business
Keywords: outsourcing, downsize, R&D

Adding to a drug-industry-wide trend of outsourcing research functions, GlaxoSmithKline is selling its Verona, Italy, research site to Aptuit, a Connecticut-based contract research organization.

The sale is part of GSK’s previously announced plan to downsize its R&D footprint. Aptuit will take on the roughly 500 GSK employees at the Verona labs—the majority of whom are scientists—bringing its overall headcount to 3,000. Aptuit will also become a preferred provider to the British drug company, scoring a contract to provide R&D services out of Verona.

The deal is similar to a pact forged between Eli Lilly & Co. and Covance. In 2008, the drug development firm bought Lilly’s Greenfield, Ind., R&D facility and hired 265 of the site’s 800 employees. Covance was rewarded with a 10-year contract worth $1.6 billion to perform toxicology and other services for Lilly, an arrangement the big pharma firm claims will eventually save it tens of millions of dollars per year.

Aptuit CEO Timothy C. Tyson says the cost savings big pharma can achieve by selling sites to contractors are related to improving capacity utilization. GSK was putting only about 20 molecules through the Verona facility annually, he notes. Aptuit expects to cut costs by handing the Verona researchers some of the 2,000 other compounds it studies for customers each year.

Although the outsourcing sector did not grow much in the past year because of capital constraints in the biotech industry, Tyson expects an upturn going forward. “With rationalization going on at all of the pharma companies, I expect a significant increase in outsourcing,” he says.

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