In the following exchange, responses were cut for length and lightly edited. The order of the questions was also changed.
On whether WuXi is becoming a drug company that launches its own patent-protected products:
From day one, I’ve said that WuXi is not going to become a pharmaceutical company. It’s never been our aspiration. We want to be a platform of technology, science, and capabilities to enable anyone to discover a new health care product to benefit patients. All that we’ve been doing is building and strengthening our capabilities. Why would we break something that is doing very well to be another of the 6,000 pharmaceutical companies in China?
On why WuXi delisted from the New York Stock Exchange:
The thing is, when we’re exposed to Wall Street, [it is] just too short term. I mean we can’t invest in the next big opportunity. In early March 2015, we had prepared a slide to go with our earnings announcement. It said, this is our core business, and it’s going to grow. The new business, we’re going to invest. After the earnings release, the stock should have gone up, or at least stay where it was. But after that earnings report, the stock went down 20%. So I thought, this is terrible: The more we do, the more we are penalized. It’s very disincentivizing to us to do something new. So I said, that’s about the time to delist the company.
On whether WuXi delisted from the New York Stock Exchange to relist on a Chinese stock market:
No! No! It was absolutely not the reason. Not to arbitrage the value between the U.S. and China stock exchanges; no, that was totally not the reason.
On how the market value of WuXi increased from $1.6 billion in 2010 to $3.3 billion in 2015:
If you remember, in 2009 or 2010, with Charles River Laboratories [which announced a deal to acquire WuXi], we only wanted to put together some fully integrated capabilities, from discovery, early development, to development. That was the thesis of that deal. But the Charles River shareholders voted down the deal. They didn’t see the value of this integrated capability. But we went on to continue to build. And we’ve proven the value of this platform; we’ve proven the value of the vision.
On whether WuXi, by virtue of its many customers, knows what drug targets or compounds are most likely to succeed:
Drug discovery and development is not as simple as you think. You think we gain knowledge and know what to make, or what will be successful, but it’s not really that way. For example, everyone goes to one target, but it doesn’t mean that this target will necessarily work. We know the popularity. But we don’t really know if it’s going to work.
On why so many entrepreneurs start drug R&D firms:
Most of these people, they joined the industry in the 1980s. At that time, it was probably the golden age of pharma. A lot of good drugs were launched. The companies were building research centers, hiring the best people—a lot of people. So all those scientists, imagine after 30 years, or 35 years, they accumulate a lot of knowledge, and then they’re getting ready to retire. A few decades ago, to build the platform, to build what we have at WuXi, it was so costly to start a pharmaceutical company. So you think about the infrastructure, the labs, the research treatment—it’s very costly. But now, they can use their knowledge and experience with basically a piece of paper and a pencil and a credit card to start a pharmaceutical company. Honestly, if you know what to make, it’s not very costly.
On whether WuXi, or research outsourcing in general, has helped increase the number of drugs that the U.S. Food & Drug Administration approves annually:
Genomics, proteomics have contributed a lot. Science, knowledge, technology contribute more than outsourcing does, honestly. We certainly contribute to the efficiency of the industry. But I wouldn’t credit ourselves for the big improvement in the number of drugs approved annually. The number of programs that people are running is higher than before. Big pharma is talking about running less programs, but the start-ups, the biotechs, they are actually running more programs.
On whether China’s drug market is promising:
Only about 30% of U.S. FDA drugs are approved in China. Ten years ago, or 12 years ago, that was fine because the Chinese market was so small. Now, it’s the second largest. So certainly, it’s a huge opportunity. So that’s why we started a business unit for product development service and partnership, just helping our global customers bring their global innovation to China.
On protecting intellectual property (IP) at WuXi:
When people send their IP to us, they trust us. We now have 10,000 colleagues worldwide. Even if 0.01% are bad guys, something is going to happen to us. Right? So that’s why our three policies are very important. Prevention: We have 15 minutes a day every day to do a compliance meeting. Protection: We have a whole series of methods, such as cameras. We also have software that we developed to look at the behavior of individuals. And prosecution: You really want to go after the 0.01% of bad guys.
To see all of C&EN’s articles that have been translated into Chinese, visit http://cen.acs.org/cn.html.