SurModic deal with pharmaceutical giant Roche a boon to Birmingham
By Michael Tomberlin -- The Birmingham News
October 09, 2009, 5:33AM
SurModics's new deal to provide drug-delivery technology to pharmaceutical giant Roche makes Birmingham "the epicenter of this project" and is a huge boost to the company's research and development operations here, the head of SurModics says.
Eden Prairie, Minn.-based SurModics, whose new Oxmoor Valley facility is expected to be completed by early 2010, announced the deal with Roche subsidiary Genentech on Tuesday.
Surmodics bought Birmingham's Brookwood Pharmaceuticals in a $62 million deal in August 2007.
The agreement calls for Genentech to pay SurModics a $3.5 million up-front licensing fee with another $200 million in fees and milestone payments possible. Genentech will then use SurModics' microparticles technology to deliver its Lucentis drug into the eyeballs of patients suffering from a particular kind of age-related macular degeneration.
SurModics then stands to gain even more in royalty payments for any Lucentis sold using the SurModics microparticles technology. That could be significant, given that Lucentis already has over $2 billion in global annual sales.
"If our joint development programs are successful, royalty revenue from future sales of a sustained release formulation of Lucentis and other future licensed products has the potential to far exceed revenue from any previous agreements SurModics has in place," SurModics chief financial officer Phil Ankeny told analysts on a conference call.
Bruce Barclay, SurModics' chief executive, said in the same conference call the deal was possible because of a relationship that Brookwood Pharmaceuticals had with Genentech.
Since the 2007 purchase of Brookwood, Surmodics has moved to invest $30 million to expand into the former Saks Inc. headquarters off Lakeshore Parkway, where it expects to create more than 300 research, development and drug manufacturing jobs.
"Kudos to all of our team down in Birmingham for the work that they've done to this point and will do going forward," Barclay said on the call. "Clearly, the epicenter of this project has been in Birmingham."
Patrick Murphy, head of economic development at the Birmingham Business Alliance, said Thursday the deal shows the potential for growth in biotechnology that exists in Birmingham.
"We're fortunate to have a pharmaceutical company like SurModics that's doing well in the current economy and their new manufacturing facility in Birmingham is going to get a lot of this contract work," Murphy said. "This helps us to, hopefully, continue to create a pharmaceutical cluster here in our region."
He pointed to Brookwood's roots in Southern Research Institute as an example of how research done in Birmingham institutions can grow into viable commercial companies.
"Being a home-grown company from Southern Research to Brookwood and now SurModics just shows what is possible if we set the environment for that kind of growth," Murphy said.
Join the conversation by commenting below or e-mail Tomberlin at mtomberlin@bhamnews.com.
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