IAG raises $52m to establish Russian preclinical GLP CRO

06-Jun-2010 - Last updated on 07-Jun-2010 at 12:18 GMT

Investors are funding the creation of a RUB1.6bn ($52m), 10,000 sq m preclinical Russian CRO to fill the gap in the nation’s development chain and undercut western prices by 40 per cent.

The project aims to bring high quality, low cost preclinical services to Russia to serve the local market and overseas firms looking to cut costs. To achieve this Investment Advisory Group (IAG) has raised funds and gained the support of a US-based contract research organisation (CRO).

Alex Geller, a partner at IAG, the firm that initiated the project, told Outsourcing-Pharma that while clinical trials and production have grown in Russia, preclinical capacity has lagged behind. To rectify this IAG is setting up a good laboratory practice (GLP) compliant site near Moscow.

Meeting GLP standards and being successfully audited by the US Food and Drug Administration (FDA) are central to the investors’ plans. This will help attract overseas pharma companies and support local firms export plans.

The Lovelace Respiratory Research (LRRI) Institute, a US-based CRO, is supporting the site’s efforts to achieve GLP. Geller said the site will offer a full range of GLP preclinical services for 40 per cent cheaper than in the west.

Big pharma companies have expressed “a real interest” in the project during discussions, said Geller. LRRI will outsource some of the work it is contracted to do to the Russian site.

Local pharma companies also represent a significant opportunity. Geller said the Russian Pharma 2020 initiative will bring local companies “out of the shadows” and lead to them exporting products around the world.

The Pharma 2020 initiative calls for 1,000 preclinical studies to be performed annually in Russia by 2015 and the CRO is aiming to capture some of this business. By 2015 it is expected that 50 per cent of the facility’s revenues will come from local companies.

The facility

Currently the project is at the drawing stage. Geller said Henningson, Durham & Richardson, a company with experience designing preclinical CRO sites, has been contracted for the work. The project will break ground later this year.

IAG has formed a conservative business plan, Geller said, which aims to grow the workload to 90 to 95 per cent of capacity by the fifth year of operation. By this time the site will employ 130 to 150 people. IAG expects to generate RUB1.3bn of revenues by 2015.

LRRI will train the staff, ensure compliance with GLP and prepare the site for audit by the FDA. Geller said the site’s employees will also gain practical experience working on the projects LRRI outsources to Russia.

Mikhail Kirpichnikov, an academic at the Lomonosov Moscow State University (MSU), will head scientific oversight of the project. Kirpichnikov will work with chemico-biological institutes of the Russian Academy of Sciences (RAS).