Friday, July 11, 2008

Pfizer's Yu Joins WuXi

WuXi PharmaTech (pictured above), one of China's leading R&D outsourcing companies, has been on a deal-making tear the last few months: in January the company bought the US biologics testing play AppTec Laboratory Services for $150 million; in late June it announced a joint venture with Covance in the preclinical testing space. Add to that a 2007 net revenue that's increased 93% from $69.9 million to $135.2 million and more than 80 partnerships with pharmas and biotechs across the industry, including large deals with Pfizer, Merck, and Vertex Pharmaceuticals, and the company is certainly a force with which to be reckoned.

Given the July 10 announcement that Debra Yu, MD, formerly a leader within Pfizer's corporate venture group, will take the reins as WuXi's new VP of Strategy, it seems likely that the newsflow is only just beginning.

As part of the Pfizer venture group, Yu spent much of her time developing value from non-traditional pharma assets, both compound and diagnostic related. In addition, she helped craft the pharma's innovation agenda, and worked to expand the development agenda through creative deal structures. She brings all those skills, plus a Rolodex of contacts from her days as general partner at Delphi Ventures and managing director at Bay City Capital to her new role at WuXi.

"Debra will provide strategic guidance as we continue building a global drug and medical device R&D service platform through organic growth, partnership and M&A," said Ge Li, the company's western-trained and forward-thinking CEO, in a press release.

"I plan to deepen WuXi's business and help simulate new business opportunities," says Yu. "My goal is be an integral part of building the WuXi of the future," she says.

Yu couldn't get too specific about her plans in an interview, but did note that she will be playing a direct role in the Covance JV as it moves forward. (We speculated a few weeks back that the deal was worth keeping an eye on because it signaled WuXi's desire to evolve into an end-to-end outsourcing play, one that could handle not only R&D but also aspects of clinical trials.)

Perhaps more importantly, Yu has the ear of Ge Li, since she reports directly to him. That fact plus Yu's long history in the VC world, suggests to this IN VIVO Blogger that we should be on the watch for some very interesting private equity types deals in WuXi's future.

Moreover, we wouldn't be surprised if WuXi morphed into something much bigger--and more important--than its already ambitious goal of being a world-leading CRO. It's a known fact that China is one of the most important emerging markets--if not the most important. WuXi, given its existing leadership position, has an opportunity to leverage that standing to become the preeminent Chinese biotech. And we're guessing Yu will help make that happen.

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