Life sciences company Agilent Technologies ($A) recently announced it would build a new U.S. plant that will more than double Agilent’s commercial manufacturing capacity for nucleic acid APIs, but the company was stingy with details. The company filled in the picture Wednesday after reporting earnings saying it will invest $120 million on the project.
The facility will be built on 20 acres the company recently acquired in Frederick, CO, about 30 miles from a facility in Boulder, where it already manufactures oligo APIs. The company will invest $120 million, which includes the cost of the property, a spokesperson explained. The company said the project will start in Q4 of this year. Agilent expects to add 150 to 200 jobs when the plant is complete in three years.
During an earnings call Wednesday, Jacob Thaysen, president of Agilent’s diagnostics and genomics group, explained to analysts that in discussions with drugmakers, Agilent has found there is a lot of interest in the new type of drugs, mostly orphan drugs, that will need nucleic acids. He said the company has seen demand accelerate and, in dollar amounts, the market is growing at about 20% to 30% a year and that could expand much further when drugs become commercialized.
Oligonucleotides are being used by companies like AstraZeneca ($AZN), BioMarin ($BMRN) and others to develop treatments for cancer, diabetes and other conditions. Antisense oligonucleotides are short, single strands of DNA or RNA molecules, but instead of modulating the activity of already-formed proteins, antisense oligonucleotides act before proteins are produced at the level of messenger RNA in the cell and so offer new opportunities for therapeutic intervention.
The company is already doubling capacity at its current site in Boulder. “We will also see that that will run out--that opportunity is really limited and we will run out in a few years from now,” Thaysen said. “And thereby the new investment and the new site will allow us to further double our capacity and even double again if we choose to do so.”
He said the decision to build the new facility in Frederick, CO, was made so the company can build off the knowledge, staff and experience the company has already developed at its facility in Boulder.
The details came after Agilent released its Q3 results Wednesday in which it reported Street-beating earnings per share of $0.49 on revenues of $1.04 billion.
- here’s the company’s earnings release
- see a Seeking Alpha transcript of the analyst call (reg. req.)