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GlaxoSmithKline chooses PPD, Parexel for drug development

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GlaxoSmithKline has chosen two contract-research organizations to handle its future clinical drug development, including PPD of Wilmington and Parexel International, based in Massachusetts.

The news is a blow to other CROs in the Triangle, which is a hub for the drug-research industry, although it's unclear which companies were competing to work with GSK.

GSK spokeswoman Melinda Stubbee declined to name other companies that submitted bids. "It was an extremely competitive process," she added.

The British pharmaceutical company, which has its North American headquarters in Research Triangle Park, has some existing contracts with Durham-based Quintiles that will continue. Quintiles spokesman Phil Bridges declined to comment on Friday.

Contract-research organizations conduct clinical trials and provide other services during the development of experimental drugs.

As with other pharmaceutical companies, GSK is trying a variety of ways to reduce costs to offset slower sales and increasing competition from cheaper, generic medicines. That includes slashing hundreds of local jobs in recent years and reducing its real-estate holdings.

In June, GSK chief executive Andrew Witty told analysts that GSK would move from working with "30 CROs down to just a couple" to cut costs and streamline its outsourced clinical work. At the time, he didn't name the companies with which it would be working.

Details of GSK's "strategic relationships" with PPD and Parexel are still being negotiated, Stubbee said.

PPD is based in Wilmington, but employs about 1,400 people in the Triangle. The company was started 25 years ago by Fredric N. Eshelman, a 1972 graduate of UNC's pharmacy school who is now PPD's executive chairman.

"We are pleased GSK has selected PPD to enter into a strategic relationship to streamline and accelerate GSK's clinical development programs," said PPD CEO David Grange, in a prepared statement. "While the scope of services is still being determined, we expect this will be a comprehensive, long-term alliance.”

PPD shares rose 9 cents Friday to close at $24.78. The stock is up 19 percent in the past year.

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About the blogger

Assistant Business Editor Alan M. Wolf joined the N&O in 1999 covering the business of health care. He became an editor in 2001, and helps oversee the paper's daily business coverage and Sunday Work&Money section. He lives in Clayton with his wife and two children. Reach him at 919-829-4572 or e-mail him.