California Breathes Sigh of Relief as Genentech Invests $600 Million to Expand Vacaville Site

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Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Genentech Incorporated (NYSE: DNA) (South San Francisco, California) is in the midst of a massive expansion project at its site in Vacaville, California. In spite of the fact that Genentech was founded there, the project was never a sure thing for the state, as others across the country lobbied hard and lucratively to attract the project. Governor Arnold Schwarzenegger got involved personally by talking directly with company officials. Ultimately, Genentech decided to go with the Vacaville site for a variety of reasons, including its hefty existing investment in land and facilities and the city's efficient permitting process.

Genentech is constructing three new buildings, which will add almost 400,000 square feet of space on a 20-acre portion of their existing 96-acre site. Labeled Cell Culture Production (CCP2), the expansion will double the size of the existing facility and is expected to offer employment to almost 600 new employees. Genentech has initiated a defined sustainable growth plan, dubbed "Horizons 2010". The expansion is part of the ambitious plan that calls for the development and production of five new oncology products to be on the market by 2010, along with having five new immunology products well into development, with clinical trials at the same time. Construction is expected to start next month and take several years to complete.

Genentech is anxious to continue the strong success it has found with its two lead drugs, Rituxan for non-Hodgkin's lymphoma and Herceptin for breast cancer. In the past year the company has received FDA approval for new asthma, colon cancer, and psoriasis drugs, with a robust pipeline.

While California scored on this project, it is no guarantee that any future Genentech expansion projects will be built there. A number of the company's senior management staff have made public that they would have definitely gone out of state, if not for the company's existing infrastructure and the need to ramp up production quickly. California has earned a reputation over the years for not being "business-friendly," for reasons ranging from weak incentive programs to stringent regulatory issues. With virtually the entire country nipping at California's heels for every big life science project, all offering everything from free land to major financial incentives, it might be wise during this economic development "remission" if the state's legislators got to work on finding their own miracle "cure".

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