Biogen to sell plant to Genentech for $408 million
By Val Brickates Kennedy, MarketWatch
June 17, 2005
BOSTON (MarketWatch) -- Biogen Idec announced late Thursday that it plans to sell a California plant built to manufacture its recalled drug Tysabri to fellow biotechnology giant Genentech Inc.
Biogen will sell the Oceanside, Calif.-based plant, built in December 2004, to Genentech for approximately $408 million in cash. Genentech will use the plant to manufacture its popular oncology drug Avastin, the companies said.
The companies added that they expect the plant's 430 employees will be either retained by Biogen or offered new employment with Genentech.
A Biogen spokesman said that Biogen's decision to sell the plant did not mean it was planning to scale back its manufacturing capacity for Tysabri. He said that Biogen was developing a more efficient manufacturing process for the drug that will allow it to be manufactured at the company's plant in Research Triangle, N.C.
Juves added that the plant sale should save Biogen $80 million to $100 million a year in expenses. The company will take an after-tax charge of $50 million to $57 million.
Tysabri, an antibody-based drug approved to treat multiple sclerosis, was pulled from the market in late February over safety concerns. Biogen and partner Elan Corp. are currently reviewing the safety profile of the drug to determine if it should be put back on the market and, if so, in what capacity.