What does the future hold for the young researchers of central and eastern Europe, as the first of these countries prepare to join the European Union in 2004? Research, both public and private, is seen as crucial to these countries' economic integration. But low investment in research--particularly applied research--means that opportunities for eastern European scientists to thrive in their home countries are sadly limited.

Yet one company is bucking this trend. At PLIVA, a pharmaceutical company based in Zagreb, Croatia, researchers work in an environment similar to that enjoyed by their peers in the western half of the continent. Half a year ago, PLIVA opened its new research institute, a glittering 21st century structure full of state-of-the-art equipment. Dubravko Jelic, a young chemist who joined PLIVA in 1998, says: "I have a unique opportunity here to follow a research career in industry."

Since 1990, other pharmaceutical companies in this region have been taken over by Western giants. In most of the new subsidiaries, opportunities for graduates are limited to sales and support, and occasionally development. So what makes PLIVA different? The answer can be given in one word: azithromycin. Scientists at PLIVA patented this blockbuster antibiotic in 1981, and the company has been reaping the dividends since sales began in 1988.

The company that became PLIVA was founded as "Ka?tel" in 1921; its basic research programme started in 1936, in collaboration with Professor Vladimir Prelog of the University of Zagreb, winner of the 1975 Nobel Prize in Chemistry. Ka?tel became one of the first global producers of sulphonamide antibiotics, and was renamed PLIVA--the name is the Croatian acronym for "Production of Drugs and Vaccines"--when it was nationalised after World War II. PLIVA opened its own Research Institute in 1952, was privatised in 1993, and floated on the London stock exchange 3 years later.

Kruno Kovacevic, deputy director of PLIVA's research division, explains, "As a medium-sized company, we can't do as much as a pharma giant like GlaxoSmithKline. We therefore concentrate on two therapeutic areas: anti-infectives and anti-inflammatories." Currently, the company has two products in Phase II clinical trials, one in each of these areas: an anti-inflammatory agent targeting inflammatory bowel disease and an antifungal. In 1999, PLIVA's researchers initiated a joint project with GlaxoWellcome (now GlaxoSmithKline) to work on macrolides, the class of antibiotics that includes azithromycin.

Following the acquisition of several companies in recent years PLIVA employs about 7000 people, more than 600 of them in R&D, spread across seven sites (Zagreb, Paris, Brno, Krakow, Dresden, India, and New Jersey). Of the research staff, 81 have a PhD.

Just like their peers in the best Western research environments, PLIVA's young researchers have opportunities for training, collaboration with academia, and travel. Senior staff often attend conferences, but their younger colleagues are more likely to attend training courses or spend time in a foreign laboratory learning a new technique. Jelic's experience is typical. He first worked for PLIVA during his final year undergraduate project and joined the company immediately after his first degree to work on peptide chemistry. Soon after, he spent 3 months working in the peptide chemistry research group of the Hungarian Academy of Sciences in Budapest. After returning, his research was interrupted by his compulsory military service but, he explains, "They kept my job free for me to come back to." During this time he also started studying for a PhD at the University of Zagreb; he hopes to defend his thesis next year.

Meanwhile his research focus changed in 2001. "We had started setting up a high-throughput screening facility, and I was asked to set up the compound library and database," he explains. This database now contains thousands of compounds, many of which are unique to PLIVA.

Kruno Kovacevic and Vesna Gabelica

Vesna Gabelica, director of applied research at PLIVA, recognises that running an R&D company in Croatia brings some particular challenges. It is difficult to find skilled research staff locally in some areas, such as bioinformatics and combinatorial chemistry. "We can't find enough young Croatian scientists with these skills, so we sometimes have to recruit from Western countries, and we do pay them more," she says. Some top managers are also recruited from overseas, but most often these are Croats who have spent much of their careers abroad. "It is great that we can encourage our best scientists to return to work in Zagreb and go some way to reducing the brain drain," says Kovacevic.

Another disadvantage is that all research equipment must be imported as very little is made in central Europe. Although this can be a problem for smaller Western European countries too, the fact that Croatia is outside the European Union--and not even, as yet, very far along in accession negotiations--brings its own problems. Vital goods are often held up at borders by bureaucratic customs procedures. "We are looking forward to Croatia joining the Union as soon as possible: maybe as early as 2007," says Gabelica. The fact that "local" support staff and sales representatives are not always based in Croatia may also cause difficulties. "We prefer to use central European manufacturers if possible, as we can get to Frankfurt or Munich in a couple of hours," she adds.

What does the future hold for PLIVA? The company will certainly face a challenge when the first azithromycin patent expires in 2005. Although some of its molecules are proving successful in early clinical trials, there will be a gap of at least a couple of years before any come to market. PLIVA hopes to fill the gap by launching a number of generics and specialty products. "We deliberately brought some of our research expenditure forward, to coincide with the opening of the new institute," says Gabelica. "For example, we now have two robots for high-throughput screening, and we believe this will be enough to fulfil screening needs for a couple of years."

Meanwhile Jelic and his colleagues on PLIVA's lab floor are hopeful that the company that has given them a working environment second to none in the former Communist bloc will continue to reap the rewards of its investment in research.