Drug services firm Covance halts planned Prince William lab

By Jennifer Buske
Washington Post Staff Writer
Sunday, November 7, 2010

Struggling with a lack of demand, drug manufacturing services firm Covance will not open a planned $175 million laboratory in Prince William County and will close its Vienna site, laying off more than 200 employees, company officials said last week.

On Tuesday, Covance notified the 220 employees in Vienna that the facility will close after more than 60 years in the community, Covance spokeswoman Melissa Thompson said. Covance also told Prince William officials it will not build the planned 410,000-square-foot drug-testing laboratory at the county's prized Innovation @ Prince William Technology Park.

"The county staff has been very supportive, and so has the community," Thompson said. "We are really disappointed we can't proceed forward as planned. The decision to close the Vienna [facility] and not expand was purely driven by the market. The industry capacity now exceeds demand."

Covance, which will keep open a site in Chantilly that has 55 employees, announced in fall 2007 that it would build the Prince William laboratory, which would have focused on safety, testing and analysis services and would have been one of the county's largest employers. Covance purchased the roughly 40-acre site from Eli Lilly, which halted a planned insulin manufacturing plant in early 2007 because of similar circumstances, county officials said.

Covance, headquartered in Princeton, N.J., was awarded $3.7 million in incentives from the state and county governments to open in Prince William, but the money was never released to the company, county officials said. When Covance announced its plans in 2007, Wendel Barr, at the time the company's senior vice president and president of early development for North America, said that "the increased demand . . . for our preclinical safety service offerings has led Covance to seek opportunities to enhance and expand our operations in Northern Virginia. . . . With our long history in the area, we are looking forward to continuing our relationships as a member of the community."

Although Covance's initial plan was to move 450 employees to Prince William from its other Northern Virginia sites by 2011 and add 100 more jobs by 2014, county officials said the company pushed the project back last year because of the recession. By this August, they had asked to put it on hold indefinitely. Last week, the company reported a third-quarter loss.

"I wish they were still going to open, but frankly this is something I am not surprised by, since they had delayed the facility before," said Corey A. Stewart (R-At Large), chairman of the Prince William Board of County Supervisors. "It will take us a little longer to have that site developed than we had hoped, but there is no question if it doesn't happen now, it will be hot for development as soon as the economy starts to rebound nationally."

County officials had hailed Covance's announcement to move into Prince William. It provided the research and development jobs the county was looking to attract and would have been an economic boon for Prince William. Representatives from the Norfolk chapter of People for the Ethical Treatment of Animals, however, urged county officials not to support Covance because of the company's use of animals for product testing.

In 2005, PETA conducted an undercover investigation of Covance's Vienna lab. A PETA worker videotaped primates that were choked, hit and denied medical attention even when badly injured, PETA said.

The Agriculture Department and the Food and Drug Administration investigated the claims, and Covance was fined $8,720, company officials said.

Covance officials plan to sell their site at the technology park, and Prince William officials said they will continue to focus on attracting other businesses to the park, which focuses on biotechnology, information technology and government contracting.

"We've worked with Covance closely for many years; it was the right project and made sense," Prince William spokesman Jason Grant said. "If the market changes and they need capacity, we'd certainly work with them again. "

Thompson said the Vienna facility, which focuses on toxicology, is being closed because of a decline in that market. The facility is also one of the company's older ones, she said, so it is more costly to maintain. She said employees will remain with the company for "several months" as Covance gradually shuts down its operations. Employees have been encouraged to apply for similar jobs within the company, but those jobs would be outside Virginia, she said.

"You always hate to lose any company, particularly one that has been here for a while," said Gerald L. Gordon, president of the Fairfax County Economic Development Authority. "The impact on the economy will be felt primarily in the bioscience areas; it was one of the strongest bioscience companies we had, and that's an area of emphasis for us."

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