Building a bioanalytical portfolio in drug research

sp²
(September 1, 2009)

Mike Schlosser explains the strategy behind WIL Research Laboratories' acquisition of Midwest BioResearch, and how the company now has an integrated service offering including immunoanalytical and bioassay techniques, small-molecule bioanalysis, genetic and general toxicology services, safety pharmacology, analytical chemistry and metabolism capabilities.

WIL Research Laboratories, LLC acquired Midwest BioResearch, LLC in February of this year and has integrated the companies' service offerings through scientific collaboration, sharing of best practices and marketing. Midwest BioResearch has expertise in immunoanalytical and bioassay techniques and small-molecule bioanalysis, supporting both clinical and non-clinical research, and genetic toxicology, complementing WIL Research's contract research service offerings which include expertise in chronic, neuro-, inhalation, and intravenous toxicology, developmental and reproductive toxicology, safety pharmacology, bioanalytical chemistry and metabolism.

Midwest BioResearch was founded in 2003 by scientists, directors and managers from major pharmaceutical companies to provide drug disposition and selected specialty toxicology services. Dr Michael Schlosser is the president and founder of the company, and he continues to lead operations at its 16,000 ft² facility at the Illinois Science + Technology Park in Skokie, Illinois, USA, the location of a former Searle/Pharmacia/Pfizer R&D facility. Since its foundation, Midwest BioResearch has grown its business rapidly and now employs almost 50 people. WIL Research Laboratories was founded in 1976 and is located close by in Ashland, Ohio, USA.

WIL Research Laboratories has experienced strong growth (growing to more than 700 people by 2009), driven primarily by its reputation for scientific expertise. "WIL Research Laboratories, LLC is the only major US CRO that has not changed its name in the last 25 years. The name has been maintained with the development of The WIL Research Company, formerly known as WIL Research Holdings, which has acquired a number of companies over the past few years in addition to Midwest BioResearch. The acquistions have enabled WIL Research to offer a wide range of new services," says Schlosser. "Previously, WIL Research, a CRO that provided nonclinical services to a wide range of industries, was focused on toxicology, pharmacology, metabolism, and bioanalytical services, but the company has now broadened its activities through acquisitions such as those of QS Pharma, a drug formulation and analytical laboratory based in Boothwyn, Pennsylvania, USA, and toxicology and ecotoxicology specialists NOTOX BV based in the Netherlands. Other specialty offerings in pathology, for example, imunohistochemistry, and stereology, are now available as a result of the acquisition of Biotechnics based in Hillsborough, North Carolina, USA, near Research Triangle Park, an area rich in biotech companies. These acquisitions have allowed WIL to expand its areas of operation both scientifically and geographically."

Focus on scientific expertise
Schlosser says WIL Research's business model focuses on its scientific expertise and its integration with the needs of customers. "This focus is coupled with WIL Research's comprehensive interdisciplinary services and their many years of experience with regulatory agencies in the pharma, food, pesticide and chemical industries." However, although in the past WIL Research has relied heavily on its reputation in the marketplace to secure business, due to increased competition in a challenging economic climate, the company is adopting a more aggressive integrated marketing approach for the future. With regard to pharmaceutical companies, WIL Research will continue to work with customers ranging from small biotechs to large Pharma, as it has a strong understanding of the needs of both types of company. Schlosser says a trend in the industry is the blurring of the lines between biotech and large pharma due to acquisitions, and WIL Research is well positioned to serve the needs of the new types of pharmaceutical companies arising from this trend.

"Many of our customers prefer to work on a long-term partnership basis, and we expect to see more of these types of preferred partnership arrangements being established and formalised in the future," he says. "Some have suggested the contract services sector is becoming more of a commodity business, but we don't see it that way. Instead, we see a sector that needs scientists with the right expertise, and who are visible and communicating with their clients We see a sector that needs companies with strong track records in their area of specialty, and strong financing to support and expand high-tech services."

That's one reason why WIL Research operates exclusively as a service company, providing the scientific services clients need and expect. They are not in the business of discovering, developing and retaining product-related intellectual property (IP). This means WIL Research does not out-license technology as such, but the company is routinely asked to develop novel assays and systems based on its expertise ."Midwest BioResearch did, in the past, consider establishing a general portfolio of IP but realised this would require a different business model and so decided to remain a company operating strictly a service-based business model," says Schlosser.

Wide geographical coverage
In the USA,WIL Research serves all the major life sciences geographical from the Boston biotech and North-Eastern Big Pharma areas, to the North Carolina Research Triangle Park and neighbouring regions, to biotechs on the west coast including San Diego and San Francisco areas of California and in the Seattle area of Washington. Part of Midwest BioResearch's strategy has been to help grow biotech and, thus, their business in the Chicago and greater Midwest region, an area in which, according to Schlosser, contains many excellent research universities, several large pharma companies, and an assortment of small biotech companies, with the latter being underdeveloped given the high potential in the region. "One of the great advantages of being acquired by WIL Research is that they already had great relationships with many of the companies in our area" says Schlosser.

"More federal grant money is being made available in this region to assist universities in developing their own drug discovery programmes, and this will hopefully help fuel the growth of the biotech sector in the Chicago area," he says. "And of course there are several big name Pharma companies in the region, so there are a number of business and scientific relationships to maintain and pursue locally."

WIL continues to look internationally: "In Europe, the acquisition of Notox by WIL in 2005 was meant to give the company a foothold in that market, and we will be looking to increase the amount of work we do in the European pharmaceutical and chemical sectors. Obviously, the REACH regulations mean there is a lot of demand in Europe for services like ours, especially for chemical toxicity studies and the NoTox facility is well positioned to service those needs. We are strategically adding additional personnel in Europe to increase our presence in that market."

"Additionally, while we have a stable and solid relationship with a few Japanese companies, we want to increase our business in that sector as well. To this end we have established a newly configured sales force in Japan, and placed Japanese-speaking scientists on our research teams in the US."

Supporting development of protein therapeutics
Midwest BioResearch (now WIL Research) has done a great deal of work for the pharmaceutical industry in support of Investigational New Drugs (INDs) and registration of new products, with an increased demand for testing novel protein therapeutics. Schlossser says that by the time most biotech companies have entered Phase 2/3 clinical testing with their lead protein drug, they have partnered with a larger pharma company, giving WIL opportunities to work with large pharma during late-stage development. He says that, relative to small molecules, the percentage of protein therapeutics in drug pipelines has greatly increased from ten years ago, which means there has been a rapidly growing demand for expert services in this area. Since WIL Research has been actively developing expertise to support protein therapeutics through both organic growth and strategic acquisitions, the company is in an excellent postion to capitalize on this investment.

"Funding of the biotech industry is down relative to previous years; there is less overall demand for nonclinical CRO services which creates increased competition among these CROs and sets up a buyers' market for biotech companies. For WIL Research, the demand for services supporting protein therapeutics has remained high and is a major contributor to our business, thus helping us maintain our competitive place in the market. As other CROs try to grab market share. Although the economy is still on shaky ground, albeit improving, the health care industry, particularly the Pharma industry and the CROS that support this industry appear to be on solid ground. CROs with strong scientific reputations for service and performance will emerge in a strong position within an improving economy," concludes Schlosser.

Download Full Article >