A $50 million investment to establish Texas as the "third coast" for biotechnology and biopharmaceuticals has produced another dividend as leaders of Fujifilm gather with state and Texas A&M officials Thursday in College Station to herald the Japanese conglomerate's acquisition of Kalon Biotherapeutics, a private vaccine-making company the university formed to develop and manufacture life-saving drugs and vaccines.
Last week, the subsidiary Fujifilm Diosynth Biotechnologies USA took 49 percent stake in Kalon with plans to later buy the whole company. The acquisition will allow Fujifilm to expand its supply of an experimental Ebola drug, Avigan, as well increase testing and manufacturing of vaccines and drugs, including influenza and cancer, in existing infrastructure.
In 2011, the state of Texas invested $50 million to establish a National Center for Therapeutics Manufacturing at A&M to generate biotechnology and biopharmaceutical jobs and improve the country's response to pandemic diseases or bioterror threats. At the time, no cluster of such companies existed in Texas and there was no workforce to support one. The east and west coasts have been the established leaders in biotech research, development and manufacturing.
"(Thursday's) signing represents an important next step and an exciting new chapter for the State of Texas, which is fast becoming a global leader in biotechnology and pharmaceutical manufacturing," Gov. Rick Perry said in a statement.
Perry will attend Thursday's ceremony in College Station.
The deal comes less than two years after the state and A&M secured a partnership with GSK, formerly GlaxoSmithKline, the world's largest vaccine maker, to develop and manufacture its new generation of influenza vaccines in Texas, putting the state in the center of the vaccine industry.
"We intentionally formed Kalon as a means to an end," said Dr. Brett Giroir, CEO of A&M's Health Science Center, explaining that the company was designed to be taken over by a major pharmaceutical corporation. "This has not happened accidentally. The state, the country and vaccine development depended on it."
Kalon, established in 2011 and now renamed Fujifilm Diosynth Biotechnologies Texas, will fulfill existing contracts, including one that was part of a 2012 federal award establishing a Center of Innovation in Advanced Development in Manufacturing at A&M.
The center, one of three nationwide tasked with developing and manufacturing vaccines and drugs to respond to pandemics and bioterror threats, is expected to eventually have the capability to produce 50 million flu vaccine doses within four months of getting U.S. government approval. Other possible projects include developing and producing biological, chemical, radiological and nuclear medical solutions.
The government contract is worth an estimated $2 billion over the next 25 years, federal officials have said.
Analysis by the Waco-based Perryman Group has estimated it could create a biotech industry with nearly 12,000 jobs and deliver an economic impact to the state in excess of $70 billion in that time frame.
The center is working on possible anthrax vaccines for the government and also in partnership with the University of Texas M.D. Anderson Cancer Center on vaccines for patients with multiple myeloma, a cancer of the plasma cells.
No one from Kalon or Fujifilm Diosynth would say how much the acquisition could be worth. Andrew Strong, Kalon's founding president and CEO, described the company as a "university startup" that was profitable this year. He said taxpayers would see substantial return on their investment.
In an email, Perryman Group founder and president M. Ray Perryman said it's too soon to know how the Fujifilm acquisition could affect the state.
"We recently ran a simulation of the benefits to Texas if it could achieve a concentration in biomedicine equivalent to that of California by 2040," he said. "The incremental benefit, over and above baseline growth projections, is almost $27 billion per year in gross product in today's dollars and more than 240,000 permanent jobs."
Strong said officials started seeking an acquisition more than a year ago with the hope Fujifilm, with 80,000 employees worldwide and an estimated $24 billion in revenue, would be interested in a deal. The local company has more than 100 employees and an estimated $20 million in revenue. Employees earn an average annual salary of $70,000.
Leaders of Fujifilm and Fujifilm Diosynth said the acquisition is ideal because Kalon is designed for large-scale, rapid vaccine production and already employs a team of people who are ready to help it grow. More employees are to be hired as the company increases vaccine production.
Fujifilm has migrated into other sectors, including health care, as its film-manufacturing business has declined. The company previously bought two biopharmaceutical companies from New Jersey-based Merck & Co., one of the world's largest pharmaceutical companies.
Fujifilm Diosynth Biotechnologies operates biologics contract development and manufacturing facilities in the Raleigh, N.C., area and in the United Kingdom. It has more than 25 years of experience in development and manufacturing of vaccines and monoclonal antibodies.
Japanese conglomerate acquires A&M's vaccine manufacturer - Houston Chronicle
