Evotec Exits India

In a reversal of the trend of moving ­pharmaceutical chemistry research to Asia, the drug discovery services firm Evotec has decided to close its laboratories in Thane, India, and conduct all chemistry research in Abingdon, ­England, instead.

Evotec didn’t encounter performance or quality problems with the Indian staff, says Evotec Chief Operating Officer Mario Polywka. “They are the most amazing organic chemists.”

Rather, Polywka says, the firm’s increasing focus on high-value collaborations—including with Harvard University and the Belfer Institute for Applied Cancer Science—means that close involvement by the firm’s medicinal chemists with research partners is paramount.

The Indian labs’ operations will wind down by the end of September, Evotec says, putting 120 people out of work. Employment in Abingdon, where about 180 medicinal and other chemists work now, will increase, Polywka adds, although he won’t give a number.

Germany-based Evotec acquired the Thane operation, Research Support International, in 2009 as part of a bid to create a low-cost Asian operation. But more recently, customers have been requesting Europe-based services, ­Polywka says. In addition, Evotec had to relocate the Indian labs by June 2014 and was unable to find a comparable site, he says.

Indian contract chemistry firms such as GVK Bio, TCG Lifesciences, and Syngene continue to grow, says Nailesh A. Bhatt, an India expert who heads the Princeton, N.J.-based strategic advisory firm Proximare. But non-Indian companies often underestimate the complexities of integrating and operating an Indian acquisition, he notes, especially if the local promoter is no longer involved, as was the case with Research Support International.