AppTec CEO Baskin will depart soon, WuXi says

Bonnie Baskin, founder and chief executive of AppTec Laboratory Services Inc., will leave the company, AppTec's owners-to-be told investors Friday.

WuXi PharmaTech Inc. officials said Baskin will "pursue personal interests" in six to nine months after helping WuXi integrate AppTec.

Shanghai-based WuXi, a major pharmaceuticals services firm, will acquire Mendota Heights-based AppTec for $162.7 million in cash and assumed debt.

"I think the issue was decided pretty early," said Peter McNerney, an AppTec board member and partner with venture capital firm Thomas McNerney & Partners. "In any merger, there can be only one company in charge. WuXi wanted their own people."

Baskin "is a very successful entrepreneur," McNerney said. "She has been doing this for a long time and she wants to do what's best for this company."

Baskin did not return a call seeking comment.

AppTec provides testing, research and manufacturing services for pharmaceutical and medical device firms. Baskin, who was named Entrepreneur of the Year last year by Twin Cities Business magazine, launched AppTec in 2001 after selling the infectious-disease testing business of ViroMed, an earlier company she had founded. Baskin also breeds racehorses in Minnesota and Kentucky.

WuXi executives say they have not yet decided whether to retain AppTec's brand. But they want to retain AppTec's senior management and indicated WuXi would not cut costs at AppTec, which employs about 490 people nationwide.

WuXi Chief Executive Ge Li said AppTec will fill two important needs: a foothold in the United States and expertise in biological testing; WuXi focuses mostly on chemistry services.

AppTec also possess a broad customer base that has little overlap with WuXi. AppTec's top 20 customers account for 70 percent of its annual sales. By contrast, WuXi heavily depends on a relatively small number of major pharmaceutical firms like Vertex Pharmaceuticals, which at one point last year provided 25 percent of WuXi quarterly revenue.

WuXi "saw AppTec had a good relationship with U.S. pharmaceutical companies," McNerney said. "Pharmaceutical companies tend to be big bureaucratic organizations. They're easier to deal with if you are already in there."