Biotech Firm Gambles on New Plant
Friday, September 23, 2005
Human Genome Sciences Inc. executives yesterday unveiled the company's new $230 million biotechnology manufacturing plant -- a high-priced gamble primed and ready to make products that don't yet exist.
Replete with two 20,000-liter bioreactor tanks -- the largest of their kind -- the 290,000-square-foot facility in Rockville is the fourth-largest biotech factory on the East Coast. Human Genome Sciences executives hope it also will be one of the busiest, should the firm eventually win approval for drugs in development.
"One of these days, we hope that the large-scale manufacturing facility will help make it possible for Human Genome Sciences to bring drugs to the market to treat diseases such as lupus, rheumatoid arthritis, cancer, hepatitis C and HIV/AIDS," H. Thomas Watkins, the firm's chief executive, said at a ceremony attended by government officials and local biotech executives.
Building a manufacturing plant for products that haven't yet been approved underscores the risky nature of the biotech business, particularly for firms trying to bring their first products to market. Companies can't sell a drug, much less win approval from federal regulators, unless they have a validated facility to make the product. Firms that build biotech plants can lease their capacity to other firms, but deciding when and what to build -- in the absence of an approved product and with the possibility that any proposed drug will fail -- is one of the more nerve-wracking decisions biotech executives must make. "It's obviously a big gamble," said Edward Tenthoff, an analyst with Piper Jaffray & Co. "But the bottom line is: To be in this business, you need those resources. This is the door to the market. . . . If you don't have the capacity to make a product, you don't have a product."
Watkins, in an interview, said: "I don't think people outside the biotech industry understand the risks you have to take. We look at this as a very important milestone on our march toward commercialization."
Human Genome Sciences began developing the facility in May 2000, just as it was beginning to move several drug candidates into more advanced human testing. The firm has hired manufacturing experts from big biotech companies such as Biogen Idec Inc. and Genentech Inc. and charged them with constructing the industry's most high-tech manufacturing plant.
At first glance, the plant looks like a brewery. There are bioreactors, processing tanks, purified water tanks, boilers, chillers, clean steam generators and deep-freeze freezers. If and when the plant has something to manufacture, it will employ upward of 200 people.
"Frankly, it really is state-of-the-art," said Tenthoff, a longtime biotech analyst who recently toured the facility. "There's only a handful of these things in the United States. There's some bigger ones, maybe some more impressive ones, but that facility they have there is terrific, no question about it."
During the next few months, company executives will get a better sense of whether their gamble will pay off. They are expecting key results on tests of LymphoStat-B for treatment of lupus, and if the results are good, the company will likely barrel forward with final testing to win approval. The firm is also hoping to learn whether the federal government will buy its proposed treatment for inhalation anthrax.
In the meantime, Human Genome Sciences must still win Food and Drug Administration validation of the facility, which isn't expected until mid-2006.
"They are at the starting line now," Tenthoff said. "They have all the bioreactors in there. The pipes are connected. All the switches work. Now they have to get clearance."