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Will Ocimum Pioneer Indian Contract Dx With MWG s Array Business in the Stable?

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Will microarray research services ever be outsourced?

By acquiring MWG Biotech's microarray business, Ocimum Biosolutions, based in Hyderabad, India, got more than the German company's technology and approximately 300 customers: It attained the capability to perform contract microarray R&D work.

The purchase of MWG is the "next step forward," Anuradha Acharya, Ocimum CEO, told Pharmacogenomics Reporter this week. The microarray business will be primarily focused on chip manufacturing, where Ocimum believes that within six to eight months it can produce DNA chips that cost 50-75 percent less than competing brands made in the United States, Europe, or Asia.

But with a burgeoning pharmaceutical industry and established bioinformatics players, can Ocimum — or other Indian firms — perform profiling services and fill in the middle portion of the drug-development continuum?

The move toward microarray profiling services began with Ocimum's December agreement with Memphis, Tenn.-based Genome Explorations, which will enable Ocimum to provide expression services to researchers in India. Initially, the company will distribute Genome Explorations' services to customers in India and send samples to Genome Explorations' facility in the United States for analysis, the companies said at the time. Eventually, the two companies plan to open a microarray profiling facility in India, the partners said.

The key R&D savings that Indian companies can offer pharma and other clients is a more cost-effective workforce. "Services I'm sure we can provide much cheaper," said Acharya. "Nobody's providing it internationally, and that's where we think the market is," she said. But Acharya could not provide ready estimates of the kind of savings that clients might expect.

Indeed, Acharya counted six major facilities in India performing microarray analysis, most of them oriented toward discovery and academic research. When Ocimum's venture with Genome Explorations first opens in India, it will join a short list of organizations that mostly provide microarray research services only to clients in the country. These include: the Institute of Genomics and Integrative Biology; the Center for Cellular and Molecular Biology; and the Center for DNA Fingerprinting and Diagnostics, said Acharya.

Interestingly, a page on the CCMB website reads, in part: "[There has been a major change], especially in the area of R&D, because of the mounting costs involved with in-house projects. Outsourcing and contract [are] the new mechanics for business to sustain and grow in the new millennium."

India's Emerging Life Science IT Services Sector, a 2004 Genome Society Consulting paper, lists several more: Avestha Gengraine Technologies; GVK Biosciences; vLife Sciences; and Syngene-Strand Genomics. Only GVK and Syngene are explicitly mentioned in the report as providers of microarray research services to companies worldwide. Syngene became the first to take on any overseas pharmaceutical company's contract research in 1994, although not for microarray profiling, according to the report. Genome Society Consulting is run by Adrienne Burke, a former editor of Genome Technology, a Pharmacogenomics Reporter sister publication. Burke also wrote the report.

Granted, it is a little bit early, and a home-grown pharmaceutical industry would go a long way toward supporting microarray services. For several years, the Indian pharmaceutical industry was in the "gray-to-black" area, producing patent-infringing knock-offs and drugs of questionable quality, said Peter Boone, principal economist for SRI International. But the recent certification of drug-testing laboratories in India by the US Food and Drug Administration is bringing the products "up to FDA standards on manufacturing," he said.

With the combination of low cost, strong universities in scientific research, a powerful IT cluster based in Hyderabad, and FDA-conferred legitimacy, India has several of the pillars necessary to support genomics, said Boone. "Certainly you should be watching them," he added.

Despite an effort to find information on pre-clinical research outsourced to Indian companies by global pharmaceutical firms, "hardly anyone was able to give authentic data," although every industry source "showed much enthusiasm," wrote Jayashree Padmini in the Feb. 24 issue of the Indian pharmaceutical industry newsweekly Express Pharma Pulse. Out of $12.5 billion spent on pre-clinical research in 2004, about 10 percent was outsourced, she wrote. A major stumbling block in pre-clinical research seems to be the rarity of good laboratory practice-compliant labs and animal research restrictions, she added.

— CW

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