However, there are two issues that are often overlooked when comparing domestic and offshore outsourcing companies:

1. Productivity. We have clients who have simultaneously worked with both PharmAgra Labs and "low-cost" offshore companies and found that we were the better value. Offshore does not necessarily mean lower project cost.

2. The impact of national infrastructure on project timelines. In many foreign countries, laboratory chemicals take 2 to 6 weeks to arrive, and product shipments to the U.S. are similarly delayed. This can dramatically delay projects and negatively impact the client's internal program timeline. For example, a research project where raw materials have to be reordered three times (not unusual for longer, poorly documented syntheses) can result in the project timeline being delayed 6 to 18 weeks from the initial projection.

The above factors become more significant as the number and complexity of projects increase. In general, we believe that more complex chemistries are better handled domestically.

Other significant domestic advantages include:

• The U.S. legal system provides intellectual property (IP) protection to U.S. companies.

• Company proximity enables real-time interaction with your R&D team during normal working hours.

• There is a smaller chance of miscommunication due to language and cultural barriers.

• The U.S. infrastructure enables rapid raw-material procurement and product delivery.

• U.S. companies have a shared sense of urgency with regard to deadlines.

• U.S. companies have a greater appreciation of quality control and documentation requirements.