Big bucks in biotech: Chinese firm’s $206M purchase of Cytovance shows opportunity in industry
By Sarah Terry-Cobo
Copyright © 2015 The Journal Record
OKLAHOMA CITY – Foreign investment in Oklahoma should help the state’s biotech industry expand, said patent attorney Mike LaBrie.
Last week, Chinese company Hepalink USA Inc. acquired Cytovance Biologics Inc. for $206 million. The Oklahoma City drugmaker’s growth means it can manufacture pharmaceuticals for clients’ clinical trials on a commercial scale, Cytovance spokeswoman Cheryl Tuck said.
Cytovance manufactures proteins and antibodies used to develop treatments for diseases. The company has worked with biotech startups including Selexys Pharmaceuticals, which is researching a sickle cell anemia treatment, and Caisson Biotech, which makes drugs for diabetes. The deal allows Cytovance to accomplish its mission, Tuck said: to manufacture drugs on a commercial scale for its pharmaceutical startup clients.
LaBrie, shareholder, director and head of McAfee and Taft’s biotech industry practice group, said the transaction could help gain national attention from investors about the emerging biotech sector in the Sooner State. More attention to the state’s firms could lead to more multimillion-dollar acquisitions, he said.
“This is an indication the biotech industry is flourishing in Oklahoma,” LaBrie said. “It is a huge deal,”
Investment from the Shenzen, China-based firm follows a trend that has emerged in the last decade. Biotech firms are expanding their reach across the globe by investing in U.S. manufacturers, rather than acquiring American companies and moving them offshore, he said.
Cytovance doesn’t plan to move out of Oklahoma, Tuck said. The deal gives allow it to expand and hire more people. It has 178 employees and could add about 25 more within the next year, she said.
It will add more equipment to a 30,000-square-foot manufacturing warehouse at 3500 Santa Fe Rd. and plans to purchase another 30,000-square-foot building nearby. Within the next three years, Cytovance will expand an existing warehouse at its company headquarters at the University of Oklahoma Health Sciences Center research complex, formerly known as Presbyterian Health Foundation Research Park, Tuck said.
Company representatives are bound by a confidentiality agreement that lasts for 30 days after the deal closed on Aug. 21, and aren’t immediately allowed to discuss further details about expansion plans, Tuck said.
LaBrie said the transaction shows organizations such as i2E can foster connections necessary to bring angel and seed investors to fund biotech startups. That initial investment is critical to helping small research firms move beyond the laboratory to a global scale, he said.
“Hopefully this deal helps put Oklahoma on the biotech map as a huge success story and encourages more entrepreneurs, venture capitalists and seed investors to look at the market in Oklahoma City,” LaBrie said.
Representatives from Oklahoma City-based i2E were not available for comment by publication time.