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| KVK-Tech is buying Lockheed Martin's Newtown, PA, campus.--Courtesy of KVK-Tech |
A half-million-square-foot Lockheed Martin ($LMT) complex in Newtown, PA, now being used for commercial and military satellite work will be converted to generic drug making by a small company with big expansion plans. The deal comes at the same time that KVK-Tech is also building a $40 million sterile injectable plant in nearby Langhorne Township.
Privately held KVK-Tech announced Tuesday that it had finalized a deal to buy the 460,514-square-foot Lockheed complex in Newtown. It is one of a number of sites the defense contractor in 2013 said it would close as part of a 4,000 job- and cost-cutting move. The complex includes offices, labs and high-tech manufacturing spaces in a series of buildings spread across a 57-acre campus. It was on the market for $30 million, according to the Philadelphia Business Journal.
Anthony Tabasso, CEO of the 11-year-old KVK-Tech, said in an interview Wednesday that is he was contractually prevented from providing terms of the deal but "I didn't pay sticker price." He said the generic drug maker had one manufacturing facility in Newtown and had been looking for space to expand there when it learned in 2013 that Lockheed would vacate the campus. He said he has spent the last 14 months negotiating a deal, competing with other companies that were also interested in the campus.
Lockheed will be there until the end of the year. Tabasso said his company will start fitting out the facility in January for manufacturing and R&D. KVK-Tech sells about a dozen products in different doses, with 27 approved ANDAs and what Tabasso said was a "robust pipeline." Its two biggest products are controlled substances. The company recently completed a 12,000-square-foot vault used for its controlled substances.
KVK-Tech currently makes solid dose products but its strategy is to move into all forms, sterile, liquids, ointments and creams, with all products manufactured in the U.S. The company intends to have complete transparency for customers and the FDA to show that it doesn't have the data integrity issues and any of the other pitfalls that have created issues at plants in other countries, Tabasso said, alluding to issues that have particularly plagued generics makers in India.
"We are bullish on the made in the U.S.A. concept, especially for sterile products but across the entire product line," Tabasso said. "That is one of the pillars or our strategy."
Toward that end, the company is building a 162,000-square-foot facility near Newtown that will allow it to move into sterile injectables, ophthalmic and other products. It hopes to have the internal fitting of that plant complete in June, after which it will begin the work of getting it FDA-qualified.
The KVK-Tech deal was announced a day after another privately held drugmaker said it would buy a Teva Pharmaceutical ($TEVA) plant in Sellersville, PA--just 30 miles away from Newtown. G&W Laboratories of South Plainfield, NJ, is buying the plant and a portfolio of two dozen drugs from Teva, and offering its 288 employees jobs. The Sellersville plant is among those that Teva has marked for closure as part of its own $2 billion cost-cutting program.
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