Vaccine Firm To Expand In City

Emergent Biosolutions Will Use East Lombard Plant To Step Up Production Of Anthrax Shots

November 14, 2009|By Gus G. Sentementes | Gus G. Sentementes,gus.sentementes@baltsun.com

A Maryland maker of anthrax vaccine said Friday that it has bought a 55,000-square-foot manufacturing plant in East Baltimore that it will use to expand its operations, potentially creating as many as 125 jobs in the city over the next five years that initially were expected in Frederick.

Emergent BioSolutions Inc., a 600-person bio-pharmaceutical company with headquarters in Rockville, bought the East Baltimore facility for $7.85 million from the MdBio Foundation, a charitable and educational foundation that supports the state's bioscience industry.

Emergent spent $415,000 more to buy the land from the city.

The acquisition is part of a recent effort by Emergent to expand production capacity for its anthrax vaccine in Maryland and at a plant in Michigan, based on steady demand from the federal government.

"The preponderance of biotechs are money-losers and years away from producing revenue and profit," said Don Elsey, Emergent's chief financial officer. "The biggest difference is we had a jump-start with a licensed product that we can sell immediately."

Gov. Martin O'Malley and the Maryland Department of Business and Economic Development said in a statement that the deal strengthens the state's emerging biotechnology industry by helping Emergent continue its growth. Scott Peterson, a spokesman for Mayor Sheila Dixon, hailed the deal as "great news for Baltimore in these economic times."

This isn't the first time that Emergent has tapped local government for aid in its expansion efforts. In 2004 and 2006, Emergent obtained state financial incentives to develop two sites into manufacturing facilities in Frederick. The company received a $2 million loan from DBED and a $500,000 loan from Frederick to make improvements to the sites to prepare them for manufacturing, according to company and state officials.

Emergent spent $4 million on an engineering study, but ultimately decided the Frederick sites would be too expensive to build out for manufacturing, Elsey said. The buildings have sat empty and didn't create the anticipated 300-plus jobs. Karen Glenn Hood, a DBED spokeswoman, said the state agency and Frederick would get the loan proceeds back when the properties are sold.

Emergent officials discovered the East Baltimore facility, which needed fewer upgrades, was on the market this year.

In the Baltimore deal, DBED offered Emergent a $50,000 grant to help with environmental assessment. The city, which owned the land, offered the company a $250,000 credit on the purchase price as an incentive for job creation.

Emergent is also eligible for job-creation tax credits and other benefits for locating in an enterprise zone, according to DBED. Emergent would have to create a minimum of 25 jobs to begin to tap into the job-creation incentives the state is offering, Hood said.

In addition to the anthrax vaccine, Emergent is also developing vaccines for typhoid, botulism, tuberculosis and chlamydia, according to its Web site.

The manufacturing facility at 5901 E. Lombard St. has approval to operate from the Food and Drug Administration, which Elsey said was an important attraction.

Emergent's move into Baltimore represents only a portion of its increasing investment in Maryland. Earlier this month, the company said it would buy, for $6.4 million, a Gaithersburg product-development facility that it previously leased.

Emergent reported a $949,000 profit in the third quarter, on sales of $43.3 million. Though its revenue declined 30 percent in the quarter, the company expects total revenue for 2009 to grow more than 25 percent, to between $225 million and $240 million. Its profit for the year is expected to match last year's profit, at about $20 million, the company has said.

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