This week the UK-headquartered absorption, distribution, metabolism and excretion (ADME) toxicity services firm said it will roughly double the size of the plant in Boston, Massachusetts, US that it acquired when it bought Apredica in August 2010.
CEO Anthony Baxter told Outsourcing-pharma.com that: “Demand has been mostly seen in preclinical toxicology, notably from our Cellciphr high content toxicology assays that we acquired from Cellumen in 2010. Other demand has been seen in our higher value assays such as Cyp inhibition assays and transporter assays.
Baxter went on to explain that the specific technologies installed at the expanded site will be based on customer need but it is likely they will duplicate those Cyprotex has in the UK, particularly in high throughput ADME, to give the firm extra capacity should operations be interrupted for any reason.
“For example, should Icelandic volcanoes or any other issue that prevents transatlantic deliveries occur, we will have dual sites offering the same capabilities. Secondarily, we will have space to commercialize technologies that we acquire through purchase or partnerships and sell on to our customer base.”
US Govt demand
The increase in demand in North America does not indicate the drug industry is ramping up its investment in preclinical development as, according to Baxter, Cypotex is starting to do more work with academics and non-industry researchers.
“We see the preclinical sector as a high growth area worldwide, but especially in the US, where Government sponsored and charitable research is filling the space in drug discovery that has been, in part, exited by more traditional biotech and Big Pharma.”
And the North American increase in demand is being repeated elsewhere said Baxter, who added: “We have seen strong growth in our more historically successful customer based locations of mainland Europe. We have seen unexpected growth in India, China and Japan for our services.”
Not a marathon or a sprint
Singer Capital Markets analyst Shawn Manning was positive about Cyprotex’ plan, suggesting in an investor note that: “Expansion of its service offering combined with expanded capacity, should help Cyprotex meet its short-term challenge of driving sales growth and generating health margins.”
In response Baxter told Outsourcing-pharma.com that growing Cyprotex' business is a steady process and should be neither a marathon nor a sprint.
“We take the view that growing businesses like ours, organically and by acquisition, is by using the same analogy, more akin to a 5000M steeplechase. Sometimes you have to run hard, sometimes you have to maneuver for position and occasionally you face hurdles and water jumps.
“Our advisors expect us to do everything at the same pace but we have consistently delivered results we are confident that our investors and supporters will be pleasantly surprised with our more flexible racing strategy.”