In June 2013, WIL Research acquired the Lyon, France facility of Ricerca Biosciences (as reported here) in order to boost its offerings and geographic footprint. We spoke to David Spaight, the chairman and chief executive officer of WIL Research, about the acquisition and his long-term goals for the company.
Contract Pharma: Why did you buy this facility from Ricerca?
David Spaight: It's pretty simple. We spend a lot of time listening to our clients' needs and analyzing the emerging trends within the pharma marketplace. After taking all that into consideration, we decided that we needed to expand our biologics capacity in Europe. The Lyon facility helped fortify our biologics service offerings in Europe, strengthen our nonclinical safety assessment capability, and expand our portfolio of new specialty service projects.
CP: Europe is a bit moribund as a commercial pharma market. What was the allure of setting up shop there?
DS: If you look at our current footprint in Europe, we have a fairly large facility in the Netherlands that specializes in the industrial and agricultural chemical markets, with roughly a quarter of their business coming from the pharma market. Not only are we seeing growth in pharma biologics, but we see an opportunity by adding the capabilities we have in Lyon, to offer our clients a much more thorough offering that we couldn't provide in the Netherlands alone.
CP: What's your business strategy?
DS: We're increasingly getting feedback from pharma clients that they're looking to consolidate the number of CROs they work with. As part of that strategy, they're looking for CROs with a broad array of capabilities to support their nonclinical development programs, in areas like discovery support services, safety assessment, metabolism, bioanalytical services and analytical chemistry. We want to make sure that we provide this portfolio of services and that we can offer them geographically across Europe and North America.
We have a lot of internal expertise across our business and a strong customer service reputation. We feel that we're very well positioned to be the scientific partner of choice and help our clients get their molecules to the IND stage quickly and efficiently.
One key to making this work has been our study directors. The relationship between the study director and the client is where we really built our reputation over the years. Clients value having direct access to study directors, both because of their expertise but also for the collaborative approach to solving problems.
CP: Would you characterize this as a capability move or a geographic one, or are those inseparable?
DS: It's a little of both. We've added capabilities to our portfolio with the inclusion of the Lyon services, but it also bolsters our European presence for pharma clients. One of the things we see is that those clients tend to run a lot of their preclinical studies near their base of operations. By building this geographic presence in Europe, not only do we gain access to clients here, our global capabilities now enable us to serve the needs of many mid- and large-sized biopharmaceutical companies.
CP: How fertile is Europe when it comes to smaller, emerging biotech? The knock is that funding for startups has been weak on the Continent.
DS: We've seen very good growth in Europe in the past two years for our business with emerging biotechs. We're looking to expand our growth by tapping into the larger companies, so the state of biotech startups will not significantly impact our market goals.
CP: What sort of client base are you looking to pursue?
DS: From a biotech perspective, those mid- and large-sized biopharma companies make up a little more than 50% of the focus in Lyon. We see a great opportunity there to grow and expand. For years, our niche has been in small and mid-sized pharma and biotechs, but we're increasingly getting more contact from big pharma, looking for credible alternatives to handle their larger studies. With the new footprint and the capabilities, we've become much more appealing to them.
CP: Are you looking for preferred provider mega-deals, similar to the ones that the large CROs have signed with major clients?
DS: With the capacity that we're building in our organization, we're able to attract companies toward that. It plays into their vendor consolidation strategy, certainly. We look for those types of partnerships, and the Lyon acquisition will help bring more of those types of projects our way.
This acquisition has really been a transformational move for WIL Research. making us a key global player in this industry.
CP: What are some of the services that you've added with acquisition?
DS: Some of them are complementary to what we're doing in the United States and the Netherlands. We have a very strong development and reproductive toxicology (DART) reputation at WIL, and the Lyon facility has that same reputation in Europe. It's the go-to lab for biopharma DART studies across Europe. That's a good blend of capabilities.
We'll also leverage Lyon’s strengths in safety pharmacology and infusion technologies. We have strong offerings for both in the U.S. that will be fully complemented by the Lyon offerings in Europe.
CP: What's the immediate vision for WIL Research, and what's your five-year horizon look like?
DS: From an immediate perspective, we want to be first-in-mind to our clients. We don't necessarily want to be the biggest, but we want clients to look to WIL when they have critical work to be done. We want them to recognize us as the CRO that listens and can do it for them with the highest level of quality, the best scientific input, and on time.
We also want to continue to focus on being a magnet for talent. We've been very effective in being able to recruit people from sponsor companies as well as other CROs. Attracting and retaining top talent is crucial for our business.
We have about 1,200 employees who get up every day and focus on how they can help protect and improve human life.
CP: Sounds like a noble goal!
DS: It gets people energized for their work every day. The things we do have a deep impact on the new drugs that are coming to market.
In the longer term, we'll continue to look at opportunities for geographic expansion, as well as service line expansions and new capabilities.
CS: What other regions are you looking at?
DS: Geographically, we've had China on our radar screen for a good deal of time. We continue to evaluate opportunities there. We listen to what our clients have to say, in terms of their timing for when they want to move GLP safety assessment testing to that region. We want to make sure that we're positioned when that time comes.
There have been a number of companies that moved to that region early and pulled back. We monitor that very carefully. It's the next likely area for geographic expansion, but we don't want to go too soon.
CS: What services would you love to add?
DS: We have very good balanced portfolio in the work that we're doing for pharma and biotech clients, along with the safety assessment chemical projects. From a market segment perspective, that balance has allowed us to grow very profitably in the last three years.
We continue to explore a lot of cutting-edge technologies, both in vivo and in vitro. New models are coming forward, as are new types of in vitro safety testing. Without being too specific, there are a number of new technologies that we're looking at to bolster our portfolio and meet the needs of the clients that we serve.
CS: How long is the Lyon acquisition going to take to integrate?
DS: Integration is a core capability for our business. We're off to a fantastic start. I just held a town hall meeting here in Lyon for all our employees to discuss the go-forward plan. I anticipate we'll see a very rapid process with full integration within 120 days.
Gil Roth has been the editor of Contract Pharma since its debut in 1999.