How would you go about looking for a modest-sized facility in the U.S. to establish your own development and clinical-stage manufacturing platform?
How might a CDMO go about it today? They often add capacity and locations.
Maybe you should consider where you’d want your preferred CDMO to expand? Would the preference be for the location most assured of an available and skilled workforce?
We started down this path of inquiry in our previous editorial, documenting an India-based CDMO/Biotech looking for a facility in which it could establish operations in the U.S. In part one, we took a necessary detour to investigate how critical human relations can play a role in the site-selection process.
Today, the actual tour.
The following honest appraisal is provided by Enzene Biosciences CEO Himanshu Gadgil. He describes his recent multi-state site-selection tour, one that led to locating his company at the Princeton West Innovation Campus in Hopewell, New Jersey.
Gadgil was searching for an existing facility with pharma-compatible infrastructure in place. Initially, he was targeting ~50,000 sq ft to establish the CDMO’s continuous manufacturing platform to serve U.S.-based customers.
“We did this whole scan of pretty much the East Coast and West Coast,” says Gadgil, speaking by satellite from Pune, India, where Enzene’s current facility is located. “This was during Covid, so we were limited somewhat. We didn’t go to Texas or Colorado, for example, where we would have gone if travel was easier.”
“Starting in the East, we went to Massachusetts, New Jersey, Maryland, North Carolina – we did not go to New York,” Gadgil begins.
“On the West Coast – Seattle and the surrounding area in Washington, obviously California, starting with San Francisco and San Diego.”
He’ll soon return to another intriguing location in California. From here, let’s continue in his words (with minor editing from me).
“Seattle was interesting, partly because I lived there and love the area … but I thought at that time accessing skilled human capital would be a major challenge. I note that Amgen moved out of Seattle some years ago.
One thing you can be sure of is everywhere we went, we were told it was ‘the center of biotech investment and facilities in the U.S. today.’
However, overall, there weren’t really enough available facilities on the market for them to live up to that.
In my personal opinion, because Massachusetts has an established clientele, and is developed already, they are not keen to look at or incentivize new or small biotechs like us. Also, there is an unhealthy competition for skilled workers due to the high density of biotechs in the area.
[Editor’s Note: Gadgil categorizes CDMOs and sponsors both as “biotechs,” an interesting idea I will revisit in subsequent editorials.]
Although there were some available facilities, the ones that popped up are expensive. For example, I think Massachusetts – Boston-Cambridge – is more expensive than New Jersey. And with less state support.
I'll come back to New Jersey. First, Maryland had good options for us to consider. Then we went to North Carolina. In terms of what the state of North Carolina has done regarding infrastructure, they have established a beautiful platform for biotech. I would definitely call them a biotech manufacturing hub.
All the resources and information you need to do a comprehensive site search in North Carolina is available online. You can easily go into business there, I feel.
But at the point in time we were looking, they didn't have what we were looking for. All the facilities were either leased or not on the market. Anything that came on the market was getting absorbed quickly. Maybe the situation has changed, but that's what it was the past year or more.
Actually, you can say the same thing about San Francisco – the Bay Area. They already have well-established and growing companies. They don't need to attract more biotechs.
Staying in California, particularly interesting was Los Angeles. There definitely is a big drive to bring biotech to L.A., and they are serious in competing with San Francisco and San Diego.
The economic development and industry associations in L.A. do a fabulous job in terms of reaching out and promoting themselves.
[Editor’s Note: Gadgil singles out Dave Whelan, CEO of BioscienceLA as a prime example.]
I visited a number of different facilities, but L.A. could have similar challenges to other areas in producing sufficient skilled human capital.
Nonetheless, they are an area to watch out for these next couple of years if they continue the momentum. They may end up doing something like in San Diego, in terms of small biotech [both sponsors and CDMOs] that are there.
But for now, I’d still say San Diego has the space and facilities specifically for biopharma manufacturing.
Landed IN NJ
“New Jersey had a number of sites suitable for manufacturing – hardcore manufacturing; brownfield sites with utilities that could be easily converted.
NJ has a long tradition of pharmaceutical manufacturing excellence. Today they are in a transition.
Many pharma companies moved out of or scaled down in New Jersey, while at the same time new companies are emerging. But that's why there're GMP available sites and facilities, and the area has plenty of highly skilled human resources – including for the Princeton West Innovation Campus at Hopewell we selected. Our location will provide access to Philadelphia and Delaware – there’s a lot of talent in the region.
The New Jersey economic development folks are very good. They are persuasive. Actually, we had been interacting with them for a couple of years. Their support provided the impetus to seriously consider NJ.
So these were all factors by which we decided to go to New Jersey.
Another factor, by the way, which works for the East Coast in general, is the time difference. For us in India, the time difference works out better. With the West Coast, it's a much more difficult time difference to manage from India – and that goes for companies based in Asia in general.
So with Gadgil's selection trek, what might a CDMO/Biotech focus on for operating development and manufacturing in the U.S.?
A high premium on the (continued) availability of skilled labor
A reliance on the relationship with state and local economic development folks (and their enthusiasm for incentivizing)
And obviously, the availability of existing – read-to-go or ready for build-out – facilities
If you are or may some day be looking, here’s an early primer for you.