Watson Pharmaceuticals Cutting 600 Jobs Through Closings in New York Suburbs
Watson Pharmaceuticals will lay off about 600 employees and shut down by 2010 a manufacturing plant in Carmel, NY, a distribution warehouse in the Putnam County town of Southeast, NY, and a laboratory in Danbury, Conn. All are located about one hour’s drive north of New York.
The largest of the facilities is the 27-acre Carmel plant, where more than 500 people now work. Watson said all three facilities are being closed as part of an efficiency effort in which it is shedding surplus manufacturing capacity it obtained through numerous acquisitions in recent years. Last year as part of the same effort, Watson achieved $30 million in annual savings by shutting down and selling its plants in Puerto Rico and Phoenix, Ariz.
Watson also said it is retaining cheaper plants like one in Goa, India, which has received federal approval to manufacture products for the US market. The Goa plant is one of three Watson facilities that will shoulder the manufacturing load once the Carmel site closes. The other two are plants in Corona, Calif., and Davie, Fla.
“Given our current facilities, the capacity in those facilities, the technology based in our facilities and the relative age of all of our facilities, Carmel was the logical choice," Watson’s president and CEO Paul Bisaro said during a Feb. 20 conference call with analysts.
Watson said it will take a $34 million charge this year in connection with the Carmel closing.
The 110,000-square-foot Carmel plant was completed by Schein Pharmaceutical in 1988. Watson bought Schein in 2000, and three years later proposed a near-doubling of the plant’s size, without success.
“It's bad right now, but we can overcome it. We have a lot of tools in our arsenal,” Kevin Bailey, president of the Putnam County Economic Development Corp., told the Journal News of White Plains, NY. He alluded to the state’s new lower-tax “Empire” Zone created for Brewster, NY, which can be expanded to other areas of Putnam County if the zone’s tax breaks are used to attract a “regionally significant employer.”
The company announced its Carmel shutdown in its fourth-quarter 2007 earnings press release. Watson finished the fourth quarter with $38.4 million in earnings, compared with a $489 million loss in the final three months of 2006, which the company blamed on charges related to R&D costs, its acquisition of Andrx, settlement of litigation and a pre-tax charge for the closing of the Puerto Rico plant. Watson’s net revenue inched up to $627.3 million in Q4 ‘07, a gain of just under 1 percent over almost $621.2 million in Q4 ‘06.
Genmab Foresees No Layoffs After Acquiring Brooklyn Park, Minn., Plant
Danish-based biotech Genmab said last week it “does not foresee” any layoffs among the 170 workers at the antibody manufacturing plant in Brooklyn Park, Minn., that it acquired for $240 million cash from PDL BioPharma. The deal included land, equipment, and access to a leased space housing a development lab.
Genmab said in a statement its acquisition of the 215,000-square-foot plant was part of a broader corporate strategy to ramp up manufacturing capability so it can transition three antibodies from research to manufacturing phases annually.
The company also said it expects the Minnesota facility will provide a sustainable source of both clinical- and commercial-scale material for its pipeline, which includes 10 products in clinical development and three in later-stage clinical trials. The facility has a production capacity of 22,000 liters, achieved with two 1,000-liter bioreactors and two 10,000-liter bioreactors.
As part of the deal, Genmab will produce clinical material to supply PDL's investigational studies for some of its pipeline products, through a clinical supply agreement.
The transaction has been approved by the boards of directors of both companies and is expected to close by the end of the first quarter of 2008.
PDL, headquartered in Fremont, Calif., completed the plant for $200 million in 2004, when it was the only biopharma manufacturing site in Minnesota. Soon after, PDL discussed adding as much as 200,000 square feet to the plant and 200 additional jobs. But PDL has not been immune to the industry’s woes, and last October it laid off 103 workers from there as well as a plant in Plymouth, Minn.
Therapeutics Developer Doubles Workforce, Outside Investment With State Grant
Kylin Therapeutics, a West Lafayette, Ind., biotech company, has doubled its workforce and its outside investment following a $250,000 grant from Indiana's 21st Century Research and Technology Fund.
The grant has allowed Kylin to develop and commercialize Purdue University’s drug delivery technology for treating AIDS, cancer and other diseases. Kylin employs six associates at its Purdue Research Park offices in West Lafayette, Ind., and is in the pre-clinical stage of commercializing the RNA interference-based pRNA technology to target disease-causing genes, under a license from Purdue.
Since winning that license, Kylin has secured an additional $1.2 million in private funding and hired four professionals. Kylin — formed through a joint effort of IN-vivo Ventures and North Carolina-based Golden Pine Ventures — is one of 165 high-tech companies operating in the Purdue Research Park, operated by the Purdue Research Foundation.
First Tenant Signs, 3 More in Pipeline at Hagerstown, Md., Biotechnology Facility
The Technical Innovation Center at Hagerstown Community College has dedicated a new 4,000-square-foot biotechnology facility consisting of 11 wet labs and one common lab for lease by startup life science companies.
“This extraordinary facility is the cornerstone in building the economy of tomorrow in Washington County,” David Edgerley, secretary of Maryland’s Department of Business and Economic Development, said in a press release.
One tenant business, Nanolytics, signed up for lab space soon after a Feb. 12 dedication ceremony attended by officials from Maryland and Washington County. Chris Marschner, manager of the TIC, told the Hagerstown (Md.) Herald-Mail that lease agreements with three other startups were pending, adding that he expected the facility to be fully leased by the end of June.
Funding for the $1.3 million project came from DBED as well as the Maryland Technology Development Corporation, and the Board of County Commissioners. Construction began in July 2007.
In tandem with constructing the lab, HCC launched a biotechnology curriculum last fall. Students can earn a certificate or degree in biotechnology, then participate in internships available in the new wet labs facility.
BioMed-Prudential Venture Enters Into $245M Loan for Cambridge, Mass., Project
A joint venture of BioMed Realty Trust and Prudential Real Estate Investors entity PREI-R has entered into a secured construction loan with Wachovia Bank, National Association, and other unnamed lenders for about $245 million toward construction of 650 East Kendall Street, a roughly 300,000-square-foot life sciences building in Cambridge, Massachusetts.
The loan was offered at a floating interest rate of London Interbank Offered Rate (LIBOR) plus 150 basis points, or 1.5 percent. The construction loan has a maturity date of Aug. 13, 2010, and is secured by the 650 East Kendall Street property and related collateral.
Proceeds from the construction loan will be used in part to repay a portion of the joint venture's existing $550 million secured acquisition and interim loan facility from KeyBank National Association and other unnamed lenders, and to fund the balance of the anticipated cost to complete construction of the project. The venture also extended the term of the existing secured acquisition and interim loan facility by one year, to April 3, 2009, with no additional changes to the pricing or terms of the facility.
Kent Griffin, CFO of BioMed Realty, cited “the challenges in the broader financial market" in a statement announcing the loan and extension.
Based in San Diego, BioMed Realty is a publicly traded real estate investment trust that owns or has interests in 68 properties representing 104 buildings with about 8.5 million rentable square feet, plus about 1.9 million square feet of development in progress. PREI, based in Parsippany, NJ, is the real estate investment management arm of Prudential Financial, managing $400 million in gross assets as of Sept. 30, 2007.
Qiagen Opens Asia-Pacific Service Center in Singapore
Qiagen announced last week that it has opened a new service solutions center in Singapore to serve the entire Asia-Pacific region. The facility joins the firm’s six existing centers in the US, Europe, and Japan.
Qiagen said that the new center will help it serve customers in the research, applied testing, pharmaceutical, and molecular diagnostics markets in the entire Asia-Pacific region including Australia. The facility also will provide customer care and technical service requests in regional languages including Korean, Mandarin, Cantonese, Malay, and English.
"With this investment we can better respond to the needs of each and every customer, and we can also extend our services to 24 hours a day, 7 days a week in the near future,” Qiagen CEO Peer Schatz said in a statement.
Qiagen recently expanded its operations in Singapore through the creation of Dx Assay, a molecular diagnostics joint venture with Bio*One Capital. The venture will collaborate with all of Qiagen’s development facilities, including Digene’s operations, in developing new assays.
Qiagen currently employs more than 50 staffers in Singapore.
CORTEX Seeks $15M in Tax Credits Toward $200M Expansion Goal
The Center of Research, Technology and Entrepreneurial Exchange, the St. Louis life sciences incubator also known as CORTEX, has requested from the Missouri Development Finance Board $15 million in tax credits that it would combine with private financing to fund a $200 million, 1 million-square-foot expansion over the next five years, the St. Louis Business Journal reported.
CORTEX made its request during a preliminary presentation attended by several supporters of the incubator, including its CEO John Dubinsky; Rodney Crim, executive director of the St. Louis Development Corp.; Marcia Mellitz, president of the Center for Emerging Technologies; and William Danforth, chancellor emeritus of Washington University and co-founder of the nonprofit Coalition for Plant and Life Sciences.
The five-year plan is part of a longer 20-year vision of building $1 billion in life sciences space, bringing thousands of jobs to the city, Dubinsky told the board.
According to the Business Journal, CORTEX told the board it is in talks with numerous life sciences occupants, including a Fortune 500 firm looking to build a 300,000-square-foot facility for more than $200 million; another Fortune 500 company looking to build a 30,000- to 50,000-square-foot research facility; the US government, which wants to develop a 30,000-square-foot medical research facility; a 100,000-square-foot production facility; and a national disease research organization looking to relocate its office from New York City.