Human Genome plant financing completed $40 million human protein production facility

January 14, 1998|By Mark Guidera | Mark Guidera,SUN STAFF

Human Genome Sciences Inc. said yesterday that it completed financing for a new $40 million human protein production plant in Rockville.

The deal saves the company from tapping into its own cash reserves or issuing new stock to raise capital for the project, company officials said.

The company has signed a long term lease for the $40 million facility with the Maryland Economic Development Corp. The quasi-state agency will own the 80,000-square-foot building and land.

Human Genome has the option to purchase the building during the lease period, state and company officials said.

pTC The new facility, which will employ an estimated 140 technicians and scientists, is being built on a 13-acre site in the Johns Hopkins Belward Research Campus, located near Human Genome's Rockville headquarters.

"This financing arrangement is a really important part of our strategic plan for the future," said Steven C. Mayer, chief financial officer for Human Genome. "A lot of people at the state, county and MEDCO have worked really hard to put this complicated deal together."

The Rockville-based company is attempting to shift from a genomics research-oriented company to a drug development firm.

MEDCO, state Department of Business and Economic Development officials, and Montgomery County put together a financial incentive package to ensure that the facility could be constructed without Human Genome tapping its own cash reserves, said Mayer.

The company now will be able to use its $180 million in cash to fund product development, he said.

Human Genome is gunning to get its first drug candidate into clinical trials this year.

"The strength of this company is what ensured this deal got done," said Hans F. Mayer, executive director for MEDCO.

To fund construction, MEDCO borrowed $23 million from First National Bank of Maryland, said Mayer.

The financing package for Human Genome includes three low-interest loans which are payable over 20 years.

The construction loans include: $3 million from the Maryland Commercial and Industrial Redevelopment Fund to MEDCO, $2 million from the Maryland Industrial Land Act, and $2 million from the state's Sunny Day Fund, which is used to attract new companies or to assist existing Maryland companies in expanding. The company will be able to draw on the loans as construction progresses.

Also, Montgomery County has agreed to provide $700,000 in utility and infrastructure improvements to the site, and the state has agreed to provide $80,000 for worker training.

The new plant is scheduled for completion in September and will produce human proteins -- organic compounds in genes that regulate cell behavior -- and protein-based drug candidates for human clinical tests.

Melvin D. Booth, president and chief operating officer for Human Genome, said the new facility is a crucial part of the company's effort to shift from a genomics research-oriented company to a drug development firm.

Among the first protein-based drugs the company expects to produce at the plant is a treatment to prevent the toxic effects of chemotherapy on bone marrow.

Pub Date: 1/14/98

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