Thu, May 11, 2006 - Page 2 News List

Lab sale comes under criticism

UNDERPRICED?Legislators said a toxicology laboratory will be sold for less than the government had invested, but officials said the spin-off would follow proper procedure

By Shelley Shan  /  STAFF REPORTER

Legislators yesterday questioned the Development Center for Biotechnology (DCB) -- a semi-official research institution -- over the planned sale of a high-profile toxicology laboratory to Bridge Pharmaceuticals Inc (BPI), saying the price fell below the government's investment in the facility.

Taiwan Solidarity Union (TSU) Legislator Lai Shin-yuan (賴幸媛) said the government had invested NT$625 million (US$19.5 million) in the center's toxicology lab over the past 13 years.

The investment has helped the lab become one of two in Asia to be certified by the Association for Assessment and Accreditation of Laboratory Animal Care International (AAALAC), bringing it more outsourcing business from private corporations.

Lai said the center plans to sell the toxicology lab to BPI for only NT$100 million and that the center's former chairman, Ho Show-chuan (何壽川), was now a major shareholder of BPI and planned to take over the facility's operation.

According to Lai, the Ministry of Economic Affairs has provided the lab with an annual budget of approximately NT$100 million since 1986, but the DCB claimed earlier this week that the lab had been suffering financial losses.

An additional NT$396 million was lost when the lab stopped receiving subsidies from the government last year, she said.

Given the losses, it was beyond her why BPI still wanted to purchase it, she said.

"The so-called spin-off is just a nicer way of addressing the reality of an operational transfer," Lai said. "[The center] is simply trying to exaggerate the losses to justify being sold cheaply."

Responding to the accusations, Department of Industrial Technology Director-General Hwang Jong-chiou (黃重球) said that many multinational pharmaceutical companies have outsourced toxicological experiments to labs in Asia since the 1990s.

The profit potential has encouraged Taiwanese pharmaceutical firms to establish their own labs, which in turn has created competition for the DCB, Hwang said.

Private corporations have commissioned the lab to conduct scientific experiments since it became certified and the growing business has exposed problems concerning the lab's shortage of manpower and resources, Hwang said.

As such, the DCB decided to bring in private investors to help expand the facility, he said.

Hwang added that the bidding process was open to the public and had followed required procedures. The winning bidder would also have to guarantee to provide priority service to domestic firms for the first five years, Hwang said, adding that 50 percent of the revenue generated through the technology transfer would go to the nation's treasury.

Hwang repeated that the center had not "sold" the lab, as the auction has not yet occurred.

DCB president Huang Jui-lien (黃瑞蓮) said the center had created another toxicology lab and retained all key staff.

The center remains the largest stock holder in the new operation, holding 45 percent of its shares.

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