WuXi PharmaTech helps boost Philadelphia's biotech sector

When WuXi PharmaTech bought AppTec Laboratory Services Inc in Philadelphia for $151 million in 2008, it became one of the biggest foreign investors in a city where biotech was a hot sector.

Since the acquisition, WuXi AppTec, as the company is now known, has become one of the biggest job creators with a staff of approximately 400. This will increase to 600 in a few years.

The company has three buildings in the Philadelphia Navy Yard, a former naval shipyard for almost 200 years, and has additional offices in St. Paul, Minnesota, and Atlanta.

"We've had quite a bit of impact economically in Philadelphia－we've added at least 200 jobs since acquiring AppTec," said Felix Hsu, senior vice-president of WuXi AppTec.

"The other thing is that Philadelphia is starting to think of itself as a biotech hub, part of the reason is that there are academic centers for gene therapy, and there's academic expertise (here in the area)," he added.

That is leading to companies coming into the city to do business, and firms such as WuXi AppTec to further invest in the area by setting up infrastructure.

The company provides a range of research services, from biologics－like gene therapy, which is the manipulation of missing or defective cells to correct genetic disorders－to supporting the development of medical device products, such as testing for material and product efficiency.

Hsu confirmed that the biotech research that WuXi AppTec is conducting is a booming sector in China with increased demand for medication and health services.

"There is huge investment in China in this area, where companies are setting up testing and biologics," he said.

"The Chinese market is growing much faster. The US is already a developed market, but in China, as a new market, fast growth is possible," he added.

Most of the company's research and expertise is still based in the United States, which is why WuXi PharmaTech, with its headquarters in Shanghai, found value in investing in AppTec and acquiring it, according to Hsu.

In a statement announcing the acquisition nearly a decade ago, WuXi PharmaTech touted the purchase as a way for it to gain a "significant US operational footprint".

"Most of the expertise in advanced therapy is US-based. A few years down the line, that expertise might be more global. China, for one, is getting much better with research and development," Hsu said.

"WuXi is willing to work in the US for strategic advancements," Hsu added.

"We think globally, where is the expertise located? If it's in Europe, we'll go to Europe. If it's in the US, we go to the US."

AppTec's established brand was also important to WuXi, especially in a highly sensitive field such as biotechnology, where scientific patents and research are closely guarded.