Worcester Business Journal

6 Worcester Business Journal | February 4, 2019 | wbjournal.com Biotech players LakePharma eschewed Worcester for Hopkinton, allowing its Chinese competitor to take its place BY ZACHARY COMEAU Worcester Business Journal Staff Writer L akePharma, Inc. wanted to expand its presence in Massachusetts, and a planned biomanufacturing campus at the former site of the Worcester State Hospital seemed like a good opportunity. e California company was going to bring 150 jobs and invest heavily in Worcester, but a Chinese competitor took its place aer LakePharma decided it couldn't wait any longer and moved into a Hopkinton facility. Massachusetts, specifically the Boston area, has a booming biotech cluster. e industry has grown by 28 percent from 2008 to 2017, and the industry paid an average annual salary of just under $150,000 in 2017, according to the Mas- sachusetts Biotechnology Council. "It's the No. 1 biotech cluster in the world," LakePharma CEO Hua Tu said. According to MassBio, more than 500 biotech companies and 48 colleges oc- cupy the Boston-Cambridge area. ose figures dwarf the Central Massachusetts numbers of 50-plus and 16, respectively. LakePharma had been in Worcester since acquiring BlueSky BioServices in 2016. at facility at the Worcester Poly- technic Institute campus is still opera- tional and the headcount has grown, but the company wanted a larger space. In late 2016, LakePharma began discussions to increase its presence in Worcester and continue to grow Worcester as a biotech hub by anchoring a 44-acre bioman- ufacturing campus at the former site of the Worcester State Hospital. e company was even publicly cited by Worcester lawmakers like State Rep. James O'Day (D-Worcester) when a state law was passed to convey state-owned land parcels to the Worcester Business Devel- opment Corp. LakePharma needed a shorter timeline e conversations between LakePh- arma and WBDC continued about mid- way through 2017, but despite enthu- siastic conversations about the project, the discussions never approached an agreement, according to LakePharma. Worcester has great potential to be- come the next breeding ground for bio- tech but requires a large player coming in to kickstart that initiative, Tu said. "We thought we would be the one, but it didn't work out," he said. e timeline for construction for a facility that LakePharma wouldn't own, a projected two years, was too long. When decision-making time came for LakePharma, demolition hadn't even started at the WBDC site. Demo- lition eventually began in 2018 aer a $15-million state grant was awarded for the project in October. "at two years can turn into three or four years," Tu said. "It was out of our control." A shell building outfitted for a biolog- ics company like LakePharma should have been built in advance, said the 10- year CEO and 21-year biotech expert. "e market is strong," he said. WBDC declined to comment for this story. Growing in Hopkinton With a desire to move quickly, LakePharma changed gears, and in December 2017 the company purchased a 69,000-square-foot vacant biomanufacturing building in Hopkinton for $4.6 million. at move coincided with a an- nouncement that same month of the company's raising of $30 million to expand its presence in Massachusetts. at's dwarfed by the $60 million be- ing invested in Worcester from Chinese firm WuXi Biologics. at company, Worcester and WBDC announced in June the plans to open WuXi's first facil- ity in the U.S. and 11th worldwide at the new biomanufacturing campus. WuXi and LakePharma operate in the same domain, but Tu pointed out one stark difference: LakePharma was founded and operates in the U.S., while WuXi has never had a U.S. presence. WuXi will receive up to $21 million from the city and state in grants, rent abatements and loans. On the other hand, LakePharma received no such public help and owns its Hopkinton building rather than having to answer to a landlord. at opens the door to possible expansions and renovations. LakePharma actually began staffing the Hopkinton facility just a few months aer the 2017 acquisition, but it began commercially manufacturing plasmid DNA at 35 South St. this past December, said Lisa Alexander, LakePharma's vice president of quality and regulatory and the lead at the Hopkinton facility. Unlike WuXi Biologics, LakePharma didn't need to build the facility from the ground up. It was the former home of a shared space between drugmakers Bris- tol-Myers Squibb and Olympus Biotech, so much of the necessary infrastructure was already in place. e building is in an ideal location right off of I-495 and the Massachusetts Turnpike, Alexander said, so it can draw from the talented professionals living in the suburbs and Central Massachusetts, the industry professionals living near the Cambridge biotech hub and the ar- Hua Tu, CEO of LakePharma LakePharma was initially negotiating to move into the Worcester Business Development Corp. campus at the for- mer Worcester State Hospital site, but the company pulled out after it wanted a more pad-ready site. LakePharma in Hopkinton Address: 35 South St. Size: 69,000-square-feet Employees: 60 now, with up to 150 when it reaches full capacity Acquired: December 2017 for $4.55M

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