July 2, 2015
By Riley McDermid and Alex Keown, BioSpace.com Breaking News Staff
Celgene Corporation is officially the mystery buyer of Merck & Co. ’s former 1 million-square-foot R&D site in Summit, N.J., the company announced Wednesday, ending months of speculation about what Big Pharma company might move into the neighborhood.
Celgene Corporation said it had acquired the site at 556 Morris Ave. for an undisclosed amount, and said the deal is slated to close in September, pending completion of due diligence. The company is currently putting the touches on the 500,000-square-foot expansion of its headquarters in Summit, N.J. and said the old Merck site was an ideal fit.
“We are grateful for our strong partnership with the Summit community and city government,” said Celgene Chairman and CEO Bob Hugin. “Summit is an ideal strategic location for Celgene; convenient to both the New Jersey and New York City talent pools. Through this potential acquisition and the construction now underway of (the company’s headquarters expansion) we look forward to further enhancing our presence in New Jersey and the Summit community.”
The Merck space vacated last year by the pharmaceutical giant was reported to be under contract in April. However, until a period of due diligence has been completed by the perspective buyer, Merck is remaining mum, according to the report.
Some area residents speculated at the time that a tech company, possibly Google Inc., could the secret buyer. The argument at the time was that with its transition into healthcare, Google could certainly make use of the former pharmaceutical headquarters that includes a 900-seat dining area overlooking the courtyard, a 250-seat auditorium, a full fitness center and 35,000-square-foot data center.
Now, however, it’s clear that Celgene will be the beneficiary or the site’s prime location—and New Jersey business-friendly tax laws and pro-biotech business initiatives.
The Summit, N.J. site is zoned research/ office. The New Jersey site would put operations closer to some of the major biotech and pharmaceutical hubs on the East Coast.
But by far the most tempting part of doing business in the state remains New Jersey’s operating tax credit, which allows companies to sell their net operating losses to the New Jersey Treasury. One of the state’s most recognizable biotechs, Celgene used the program until it became profitable, which was key to it staying in the state, said local officials.
The state’s Economic Opportunity Act has also played a huge part, Kim Guadagno, the lieutenant governor of New Jersey, told BioSpace at the Biotechnology Industry Organization (BIO) International conference earlier this month.
”The agenda is full every month, with high tech applications comprising 51 percent of the applications,” she said. That’s a huge boost—and a rapid process unheard of in other states—that keeps biotech business moving smoothly in New Jersey.
The state has also tried innovative new techniques to connect the industry with funding, including holding a “speed dating” event that matched companies with venture capital firms, said Michele Brown, president and CEO of Choose New Jersey. Indeed, the state has an angel investor tax credit, which has lured new players during one of the sector’s longest bull runs.
“For a company, it’s huge—they sell their losses to profitable companies for cash, which then can be used for ongoing operating expenses,” Guadagno told BioSpace. “We’ve doubled it under our administration during the past six years.”
After Bristol-Myers Squibb Wonder Drug Meets Endpoints, Will FDA Process Be Up to Snuff?
Our most popular story last week was about a new wonder drug that wowed the FDA. An experimental anticoagulant drug under joint development between Portola Pharmaceuticals, Inc., Bristol-Myers Squibb Company and Pfizer Inc. met all primary and secondary endpoints in a Phase III study determining safety and efficacy—and our readers responded. The hope now is it will be sped to patients as fast as possible.
That’s lead BioSpace to ask, what do you think about the drug approval process in this country? Let us know your ideas.
