Biotech plant gets go-ahead

By: BRADLEY J. FIKES - Staff Writer | Saturday, July 21, 2007 6:54 PM PDT ∞

OCEANSIDE ---- San Diego County's biggest biotech manufacturing plant is officially in business. Biotech giant Genentech Inc. is also providing hundreds of well-paying jobs and boosting North County's economy.

The plant, bought for $408 million by Genentech in 2005, recently received government approval to make Avastin, its blockbuster cancer drug.

A building that looks like many commercial office buildings, the plant has something very different at its core ---- huge, spotless metal fermentation tanks resembling those found in a brewery. The tanks are so large that they begin on one floor and end on another.

These carefully monitored tanks, deep within the building and not open to the public, are now fermenting Avastin, far more valuable than beer. Avastin, which treats colorectal cancer, brings Genentech sales of $1.7 billion a year.

The plant, in eastern Oceanside, is expected to help Genentech, based in South San Francisco, bring in even more revenue. Its tanks have a capacity of 90,000 liters, one-third of Genentech's Avastin manufacturing capacity.

This plant, which employs 590, adds the last element missing from the region's biotech industry: large-scale commercial drug manufacturing. Local scientists have long researched drugs here. But production was usually handled by a large pharmaceutical partner that manufactured elsewhere. Local business leaders want those jobs, which pay much more than typical manufacturing jobs.

"If you drew up a template of what we look for in North County, it would be Genentech," said Gary Knight, president and chief executive of the San Diego North Economic Development Council. Genentech's products are protected by intellectual property, manufactured by skilled workers who can command good wages, and provide additional administrative jobs, Knight said, ticking off the desired attributes.

The value of manufacturing

Like the rest of San Diego County, North County has benefited from high-end research jobs in biotech and high tech. But Knight and other local business leaders say that the PhDs and MBAs can't sustain an economy alone. Well-paying manufacturing jobs, the kind that once formed the foundation of America's middle class, are also needed.

But as more jobs have been relocated to developing countries, manufacturing has declined in San Diego County. In June 2004, there were 105,000 manufacturing jobs in the county, according to the California Employment Development Department, compared with 103,200 in June 2007.

Pharmaceutical production workers earned an average of $47,000 a year as of 2004, according to the U.S. Bureau of Labor Statistics. At Genentech's Oceanside plant, the lower-end manufacturing jobs pay around $30,000 to $40,000 a year, while the most skilled jobs pay from $60,000 to $80,000 a year, spokeswoman April Grant said.

The high wages reflect the exacting precision needed in biotech manufacturing. Every step in making each batch must be made under sterile conditions and documented for later inspection. Even the water that's used in the manufacturing process is highly purified. The plants are built to keep out any contamination. They are inspected by the U.S. Food and Drug Administration to ensure that everything is done according to plan.

Cells do the work

In a way, it's misleading to say that people "manufacture" drugs such as Avastin. They are in fact made by living cells, genetically modified to churn out the life-saving product.

The process starts with small, frozen vials of the Avastin-producing cells sent to the Oceanside plant. The vials are thawed, and the cells are placed into small containers filled with nutrients. The awakened cells start proliferating. When the number of cells has increased enough, they are transferred to larger containers and continue growing. At this stage, the nutrients are changed as the maturing cells are prepared to begin making Avastin.

The cells are then transferred again, to the multistory fermentation tanks deep in the building. They are nurtured there for about two weeks as the cells generate Avastin.

Now comes harvest time. Having done their work, the cells are removed from the batch. The remainder is purified in several steps to remove all unwanted by-products. What's left is Avastin, suitable for human use. (The drug is administered by injection).

Genentech has been producing Avastin since 2004 in its Vacaville plant, with 144,000 liters capacity. The approval from the U.S. Food and Drug Administration for the Oceanside plant came in April, but Genentech waited until the shareholders' meeting to publicize the news.

Corporate presence

Genentech has become a regular corporate benefactor to North County, funding scholarships and supporting charitable events. The company has helped local community colleges develop training programs for the skilled manufacturing workers Genentech needs for the plant.

"They've really shown a commitment to supporting local businesses," said Scott M. Ashton, director of sales and marketing for the Oceanside Chamber of Commerce. "When they moved into the community, they asked the chamber for vendor lists. So if they needed signs or banners or promotional materials, they would ask us to send us lists of local chamber members and businesses that do those services."

To bring that commitment down to the individual employee level, Genentech encourages employees to buy from local businesses in a program called "Genentech Goes to Town," said Kim Nguyen-Gallagher, a Genentech spokeswomen.

Encouraging employee shopping

The company gives each employee $25 in "Genenbucks" they can spend with Oceanside merchants taking part in the program, she said. Each Genenbuck spent is redeemable for money Genentech gives the chamber.

The program was held in Oceanside for the first time in September, and $14,000 in Genenbucks were spent there, Nguyen-Gallagher said.

"We love it. We love it," said Kim Clark, owner of Kids Cottage, a children's clothing and gift store that took part in the program last year. "It's the first program we've ever been involved in. We've never heard of a company doing that specifically for Oceanside businesses."

Clark said about 30 Genentech employees took part in the program, some of whom have become repeat customers. They're buying for their own families, and also for nieces and nephews, she said.

The program, which is held in other cities where Genentech has a major presence, will be repeated this September.

Genentech also courts future employees by providing scholarships and internship programs. This year, 13 North County college students were awarded paid internships at Genentech this summer. The program runs from 10 to 12 weeks. Three North County students were also given scholarships of $5,000 to $7,500.

Coming to Oceanside

Genentech got to Oceanside through a series of fortuitous events. The manufacturing plant was originally built in Oceanside by Idec Pharmaceuticals Corp., a San Diego-based biotech company that merged with Cambridge, Mass.-based Biogen Inc. in 2004. Idec chose Oceanside for its relatively low land costs, the availability of a 60-acre parcel and proximity to its San Diego headquarters.

The manufacturing plant was already under construction when the merger took place. So the new Biogen Idec continued construction.

Biogen Idec intended to use the plant to make Tysabri, a drug to treat multiple sclerosis. Tysabri sales were on an upswing, and the company needed more manufacturing capacity. But in early 2005, sales of Tysabri were suspended due to complications in two patients, one of whom died. Even if Tysabri were reapproved for sale, which it eventually was, demand would be far lower than once thought. Suddenly, the Oceanside plant became unnecessary.

Buying not building

Enter Genentech. The company was experiencing rising demand for Avastin, which treats metastatic colorectal cancer. Genentech found it faster and easier to buy the Biogen Idec plant in Oceanside than build its own.

Many of the Biogen Idec employees at the plant switched to Genentech, including the plant's manager, David Broad. Tysabri and Avastin are made by similar biotech processes, so adapting the already installed equipment wasn't too difficult.

In 2006, Genentech increased its Oceanside presence by buying a second property from Biogen Idec, a 70,000-square-foot building that the company uses to make new medicines for early stage clinical trials. This is a much smaller scale of production than the commercial manufacturing of products such as Avastin, which have already passed clinical trials and are now on the market.

Contact staff writer Bradley J. Fikes at (760) 739-6641 or bfikes@nctimes.com.

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