Baxter to put $300M into old Genmab plant

Baxter International ($BAX) has picked up the former Genmab antibody plant near Minneapolis for a small sum and will now invest about $300 million to get it ready for its own use. 

The company did not respond to a request for comment, but according to the Minneapolis Star Tribune, Baxter has indicated it will invest about $60 million in the initial upgrade of the Brooklyn Park, MN, plant and expects eventually to have 190 employees. The company is asking for a $7.4 million break on sales tax for the project and has been offered another $2 million in tax incentives from the city.

Baxter bought the facility in January, giving Genmab $10 million for the facility. The Danish biotech acquired the 215,000-square-foot facility in 2008 from PDL BioPharma for $240 million in cash at a time when Genmab decided it wanted it owns manufacturing capacity to make antibodies for cancer treatments. It had to close it down a year later when its finances got tight and it was cutting 300 jobs across its operation. Genmab said Baxter bought the plant, land and equipment, and agreed to keep on the 23 employees who have been maintaining the facility for more than three years. 

Baxter has not indicated how it intends to use the plant, but it has been expanding its position in cancer drugs. It struck a deal last year with Onconova Therapeutics for European market rights to Onconova's anti-cancer drug rigosertib. The therapy is in late-stage development for rare blood cancers and a Phase II/III trial for patients with pancreatic cancer. Baxter International agreed to pay $50 million upfront and committed $515 million in potential milestones. 

The tough job market has made many state and local governments pretty free with tax breaks, and are particularly fond of pharma projects because the the high-tech nature and better than average salaries of the jobs carry a certain cachet. Baxter has indicated salaries at the facility will average $75,000. Regeneron ($REGN) last year picked up nearly $7 million in state tax credits to help with the 300 jobs it will add at an $80 million plant and office complex it is building in New York. Actavis ($ACT) recently snagged pledges for more than $2.2 million worth of grants and tax breaks for a $40.5 million plant near Fort Lauderdale, FL, which is slated to create 220 jobs. Hospira ($HSP) is getting about $13 million worth of assistance over 10 years for an $85 million expansion of its plant in Rocky Mount, NC, and Qualicaps recently was promised a $235,000 grant for an expansion in North Carolina.

- read the Star Tribune story
- here's the Genmab release