Wuxi Pharmatech said yesterday it will team up with Covance to form a 50-50 joint venture in the Chinese mainland to offer pre-clinical research services for global pharmaceutical and biotechnology firms.

WuXi Pharmatech and the United States-based Covance will each invest about US$30 million over the next year to set up the venture, the two companies said in Shanghai.

The new joint venture will be located in the Suzhou Wuzhong Economic Development Zone in the Jiangsu Province and construction is expected to wrap up in 2009, according to a joint statement by the two firms.

Global pharmaceutical, biotechnology and medical device companies have been stepping up efforts to enter the mainland as the nation becomes more attractive for delivering outsourced discovery and development services.

Multinational industry giants hope to access the country's rapidly expanding health care market, tap into its large patient population for global trials and take advantage of its huge talent pool for outsourced research and development work.

The services that will be offered through the joint venture will be Good Laboratory Practice and non-GLP toxicology, drug metabolism, and bio-analytical chemistry services, according to the statement.

The two companies, expecting "a good return in capital from the investment," yesterday declined to disclose the specific expectations on the earnings for 2008 and 2009.

Covance said that its expansion in China will not have any impact on its Western facilities or Western expansion plans.

(Shanghai Daily July 22, 2008)