Citing a shortage of local biotech lab space, Abraxis BioScience Inc. recently moved its research and development operations to a facility it acquired in Costa Mesa.
But that doesn’t mean the high-flying West L.A. biotech, founded by biotech billionaire Patrick Soon-Shiong, has plans to leave Los Angeles County, company executives stressed. Abraxis already operates several facilities outside the state.
The company, which makes breast cancer drug Abraxane, had been performing R&D since 2006 at a rented facility in Marina del Rey. While that lease isn’t up for renewal for more than a year, Abraxis officials said the opportunity to buy a recently renovated facility in a down market couldn’t be passed up.
“If we had had a chance we would have preferred (R&D) to stay closer to Los Angeles,” said Michael Brunelle, vice president of acquisitions and development. “(But) we always prefer to own over renting when we can and had been looking for the right facility for a couple of years.”
The new R&D facility was owned by an Orange County drug company that no longer needed the site. A developer who acquired the 15-acre property in 2008 renovated and expanded the lab space; but the building has sat vacant for more than a year during the economic downturn.
Taking advantage of the depressed market, Abraxis only had to pay $30.5 million for the 180,000-square-foot building and surrounding property, less than the cost of the renovations.
“We essentially got pristine lab space that would have cost us three to four times more if we had had to do it ourselves today,” Brunelle said.
The company is moving Marina del Rey’s 100 workers to the Costa Mesa facility, which will largely focus on developing new uses for Abraxane. The product relies on a proprietary nanotechnology that was developed by Soon-Shiong to deliver cancer drugs.
The lab also is developing drug applications outside of the cancer arena that will use the same drug delivery platform. Abraxane encapsulates a widely used chemotherapy drug in a human protein, getting more of the drug into cancer cells.
A planned spinoff company, Abraxis Health, will take over that research and also develop technologies to advance the new field of personalized medicine, a special interest of Soon-Shiong. Personalized medicine involves using information derived from a patient’s genetic code to determine which therapies or drugs would be most effective in treating a disease.
Soon-Shiong retired as Abraxis BioScience’s chief executive last year, but continues as executive chairman, and he will be CEO of Abraxis Health. The main company has yet to announce a date for the spinoff or how the two companies might share the Orange County facility.
Despite the move south, Soon-Shiong and his company have deep ties to Los Angeles, where both Abraxis BioScience and Abraxis Health have headquarters on Wilshire Boulevard in West Los Angeles.
Soon-Shiong and wife Michele Chan, native South Africans, have lived in West Los Angeles and raised their family there since the 1980s. Over the past year, he has increased philanthropic giving in Los Angeles, contributing $100 million for capital expansion at St. John’s Health Center in Santa Monica. He also pledged a $100 million guarantee that enabled the county and UCLA to sign a deal that will enable Martin Luther King Jr. hospital to reopen in 2011.
The 57-year old surgeon and former UCLA researcher ranked No. 1 last year on the Business Journal’s annual list of Wealthiest Angelenos, with an estimated net worth of $6 billion. In March, he was honored as the paper’s Businessperson of the Year.
That said, his company hasn’t been reluctant about expanding out of state when conditions warrant.
Abraxis bought a pharmaceutical manufacturing plant in Phoenix from Watson Pharmaceuticals in 2007 and is opening an rennovated facility there this year. The company’s other out-of-state facilities include a manufacturing facility it acquired in Oelwein, Iowa, and a pharmaceutical ingredients manufacturing plant in Puerto Rico.
