Blu Pharmaceuticals Opens New Manufacturing Plant in Puerto Rico

Blu Pharmaceuticals Opens New Manufacturing Plant in Puerto Rico

Company to Invest $60 Million and Create Nearly 250 Jobs in Next 3 Years

 DORADO, Puerto Rico (April 14, 2010) - Blu Pharmaceuticals, LLC, a Kentucky-based generic drug sales and distribution company, opened a new manufacturing facility here today to help meet demand for medicines it will supply to the U.S. government. The company is expected to invest $60 million in the facility during the next three years and employ nearly 250 people at the facility, which will be known as Blu Caribe, Inc.

Blu Caribe is the first new pharmaceutical factory to open in Puerto Rico since 2007, when Teva Pharmaceuticals acquired an existing manufacturing facility. Beginning in 2003, Amgen, Abbott Laboratories, Elli Lilly and other biotechnology and life science companies invested billions of dollars in Puerto Rico and the U.S. territory quickly became known as "Bio Island."

Blu Pharmaceuticals acquired a 145,000-square-foot FDA-approved facility previously owned by Biovail Corporation, which announced in May 2008 that it would be phasing out its solid dosage manufacturing facility in Dorado. The company not only was able to capitalize on the existing facility, but also was able to retain former Biovail employees, including key plant management. About 170 retained employees and new hires are now working at the plant.

"The stars aligned for us in Puerto Rico," said Bill Luster, President of Blu Pharmaceuticals. "We were able to acquire a state-of-the-art manufacturing facility for pennies on the dollar of what it would have cost for us to build an operation from the ground-up, plus we were able to tap into a highly talented workforce. We have been able to transfer technology successfully to Puerto Rico in just three months, where it may have taken nine months elsewhere."

"We are delighted to welcome Blu Pharmaceuticals to our strong cluster of pharmaceutical, biotechnology and other life science companies here in Puerto Rico," said Javier Vázquez Morales, Executive Director, Puerto Rico Industrial Development Company. "We worked hard to keep that facility up-and-running and to preserve those jobs for our citizens. It is a win for everyone."

Plans call for Blu Caribe to manufacture seven different drugs in the Puerto Rico facility, including ciprofloxacin, which is the antidote to anthrax. The company also has plans to establish a research and development operation within the Dorado facility, which has a pilot plant that will allow the company to run small batches of product under development.

"It makes sense for Blu to continue its vertical integration in Puerto Rico," Mr. Luster noted. "Although we initially considered establishing our R&D operation at our headquarters in Kentucky, we have come to realize that we have the facilities and the talent to develop generic drugs in the Dorado plant."

The Economic Development Bank for Puerto Rico and Small Business Administration (SBA) provided financing for the $10 million acquisition of the manufacturing plant and equipment. In addition, the Puerto Rico Industrial Development Company (PRIDCO) provided economic incentives to help attract the company, which considered numerous sites in the U.S. and South America during the past 18 months. The company also gained other tax incentives through a sweeping set of new business attraction inducements recently passed in Puerto Rico.

"In today's tough financing environment, it made a big difference that the Puerto Rican government was willing to partner with us to help finance the project," Mr. Luster said. "The Economic Development Bank, SBA and PRIDCO were outstanding in terms of their due diligence and level of support that made this project possible."

"Everything about our experience in Puerto has far surpassed my expectations - from the talented workforce and manufacturing expertise to the financial assistance we have received," Mr. Luster said. "Given the island's vibrant life science cluster, it should not have been a surprise, but frankly, it was. I think it's a best-kept secret."

Established in Franklin, Kentucky in 2006, Blu Pharmaceuticals grew rapidly by finding a niche in Federal government contracts as a certified, minority-owned generic pharmaceutical company. The company has become a leading supplier to generic drugs to major wholesalers, group purchasing organizations, mail order pharmacies and government agencies, including the Veteran's Administration, Bureau of Prisons, Indian Health Services and the Department of Defense. For more information about Blu Pharmaceuticals, visit www.blurx.us.
For more information on locating a life science business in Puerto Rico, visit www.pridco.com.
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