Fujifilm deal boosts Texas A&M’s biotech credentials

Dec 18, 2014
Austin American Statesman

A division of Fujifilm Holdings is buying a large stake in a private company, Kalon Biotherapeutics, that Texas A&M created three years ago to operate its new bio-manufacturing center

Fujifilm joins GSK, the world’s largest vaccine maker, as the second worldwide company to invest in the emerging bio-corridor in Bryan-College Station

“Two global companies have said, ‘We’re putting our money in Texas,’” said Andrew Strong, Kalon’s CEO who has effectively worked himself out of a job

Texas A&M’s sale of Kalon to Fujifilm Diosynth Biotechnologies validates the region as a bio-manufacturing center, recoups the state’s $40 million investment and rewards the university’s gamble to create its own operating company instead of contracting with outsiders

“It was a ‘Field of Dreams’ — build it and they will come,” Strong said of the experience

Gov. Rick Perry, Fujifilm executives and Texas A&M officials are scheduled to celebrate the sale at a ceremony Thursday. Fujifilm is purchasing 49 percent of Kalon initially, with the option to buy the rest. Financial details of the sale have not been disclosed, but the governor’s office said Kalon’s owners will receive between two and five times their original investment in the cash deal. The final price depends on Fujifilm buying 100 percent of the business after it reaches certain milestones

Three years ago, Texas A&M regents had a dilemma. Construction was wrapping up on its National Center for Therapeutics Manufacturing: a state-of-the-art facility funded with a $50 million state technology grant and designed to create vaccines to fight disease pandemics and bio-terror threats

But who should run it?

The university investigated hiring a contract manufacturing firm to operate the facility, but Strong said the companies wanted too much

“We realized it was so unique we would be paying someone to learn how to do it,” said John White, a Texas A&M regent and chairman of Kalon’s board

The regents then turned to Strong, the A&M System’s general counsel who had a background in engineering and business before he became a lawyer. They seeded Kalon with an initial investment of $2.5 million and named Strong as the company’s CEO

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