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Danish drugmaker closing Brooklyn Park facility
Danish drugmaker Genmab is closing its Brooklyn Park plant as part of money-saving efforts, putting 130 people out of work.
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Danish drugmaker Genmab A/S is shutting down its manufacturing facility in Brooklyn Park and laying off 130 employees.
The company, based in Copenhagen, said it will try to sell the building, which it bought in 2008 for $240 million to develop a promising anti-cancer drug. The move is part of a broader restructuring effort to trim $150 million in annual costs as Genmab shifts more development work to outside contractors. The company is cutting a total of 300 jobs worldwide, mostly in research and manufacturing.
Genmab's decision is the latest blow to Minnesota's biotech industry. Over the past year or so, the state has seen VitalMedix Inc. and Rapid Diagnostek, two promising biotech start-ups, leave for Wisconsin. RJA Dispersions, a nanotech firm, and Draths Corp., a biomaterial maker, also bolted Minnesota.
The global recession has forced cash-starved biotech drug companies to shut down or cut back. Last December, WuXi PharmaTech, which had paid $162.7 million to acquire St. Paul-based AppTec Laboratories Inc., decided to shut down AppTec's new $28 million drug manufacturing plant in Philadelphia, the very business WuXi had coveted in the first place.
In a conference call with investors, Genmab CEO Lisa Drakeman said the company no longer needed the Brooklyn Park facility because it was shifting the work to a contract manufacturer.
"When we purchased the facility, we had products nearing commercialization," she said. "At the time, contract manufacturing resources were scarce and we were uncertain our needs would be met. We now have fewer products to manufacture in the near term. In addition, the availability of contract manufacturing has seen a significant increase."
But that explanation did not please investors and local biotech leaders, who noted the company paid a substantial sum to buy and develop a facility it is jettisoning just a year later.
"These guys were unprofitable when they came" to Minnesota, said Dale Wahlstrom, CEO of the BioBusiness Alliance of Minnesota. "To make that large of an investment and then having to close it down does seem unusual."
Analysts also worried what the move means for zalutumumab, the anti-cancer drug made at the facility. Genmab expects to release results of a pivotal clinical trial early next year.
"It seems highly suspicious that you choose to sell the facility now, three months before expecting data" on the drug, Michael Novod, an analyst with Handelsbanken, said during the conference call. "Either that data could go wrong or that at least the product will not be as big as your originally hoped for."
Thomas Lee • 612-673-7744
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