The Brooklyn Park facility, which has a production capacity of 22,000 litres, is being sold by PDL BioPharma, the troubled US company that has been hiving off assets since it put itself up for auction last October. The transaction, which is subject to the normal closing conditions and is expected to be completed by the end of the first quarter, includes land, equipment and access to a leased space housing a development laboratory. There are also some 170 employees currently working at the facility. Genmab intends to retain these staff and could add another 130-150 to bring the facility up to full capacity. "Most likely we'll be able at full scale to produce in excess of a ton of antibody a year," commented chief operating officer Dr Claus Juan Møller. Genmab believes the Brooklyn Park facility should be "sufficient to provide a sustainable source of both clinical and commercial scale material" for its research and development pipeline. The plant includes two 1,000 litre and two 10,000 litre bioreactors that support the simultaneous manufacture of multiple antibody products. This will enable Genmab to transition three antibodies from research to manufacturing each year. "Over the past few years Genmab has been preparing for the market launch of our late- stage antibodies and we continue to build a broad pipeline of antibody products, which currently includes 10 products in clinical development," noted chief executive officer Dr Lisa Drakeman. "Consequently, the need to secure significant manufacturing capacity has become an increasing priority." The PDL facility, with its "complete antibody process development platform", is "our best option to secure manufacturing capacity, allowing Genmab to produce antibodies more efficiently and cost effectively while adding key manufacturing expertise to our capabilities", Dr Drakeman added. Genmab also sees the facility as a strategic asset that can be offered as an additional service to clients. As part of the agreement with PDL, the Danish company will produce clinical material for investigational studies with certain of the latter's pipeline products. During a conference call, Dr Drakeman described the facility acquisition as a "landmark transaction for us". Based on current projections, she said, Genmab would save $100m over the next four years from using the new facility rather than farming out production to contract manufacturers. If the company had chosen to build its own facility, and that process had taken four years - while at the same time Genmab would still have sustained contract manufacturing costs - then it would probably have spent $400m rather than $240m for the acquisition, she added. The company will be issuing guidance on the running costs of the new facility at the end of March. "Either way you look at it," Dr Drakeman commented, "if we say that as an antibody company with a large pipeline approaching commercialisation, we had to have secure manufacturing capacity, this was by far the most cost-effective [solution]." It was also "far less burdensome for management", she noted. "This facility is up and running, it's beautifully designed and constructed, so all of the work that goes into producing a facility like this has been done for us." Genmab's three product candidates in Phase III trials are HuMax-EGFr (zalatumumab) for head and neck cancer (it is also in Phase II development for non-small cell lung cancer); HuMax-CD4 (zanolimumab) for cutaneous T-cell lymphoma (Phase II for non-cutaneous T-cell lymphoma); and HuMax-CD20 (ofatumumab) for chronic lymphocytic leukaemia, non-Hodgkin's lymphoma and rheumatoid arthritis (Phase II). Co-development and commercialisation rights to HuMax-CD20 were famously licensed to GlaxoSmithKline in December 2006 for a record $2.1 billion. Genmab plans to complete production of HuMax-EGFr at the Brooklyn Park facility. It will also transfer some of the production for HuMax-CD4, which is currently in the hands of contract manufacturer DSM Biologics. While Genmab still expects the commercial launch of HuMax-CD4 to be from DSM's facility, it also intends to use the Minnesota site to make up a capacity shortfall. And HuMax-CD4 should move into the development laboratory at Brooklyn Park "almost immediately", Dr Drakeman noted. Dr Møller said the company had known for a long time that DSM's capacity "is not in any way going to be able to supply enough material for the marketplace, so we have been looking for a while for a second supplier with bigger capacity". Genmab will also start working on bringing a number of products in early development into the Minnesota facility, such as HuMax-CD38 for multiple myeloma. The company has not contracted out commercial production of HuMax-EGFr. As Dr Møller explained, Genmab has already secured batch-consistency production that could be used for regulatory filings and it can use the new facility both for clinical trial supplies and taking HuMax-EGFr to market. As for overall capacity, while different cell lines have varying productivity, Genmab believes it can produce all of the HuMax-EGFr material needed "for the peak market as anticipated by us at the moment" Dr Drakeman told the conference call. "That would probably use about a quarter of the capacity of the facility." With the remaining capacity, she added, the facility should still be able to supply all the necessary clinical materials for the Genmab pipeline, and "we would still have some space for more commercial programmes". According to Dr Møller, based on a standardised cell line with about 2g per litre in the fermentation process, "you lose something on the downstream but that would give us more than 200 kilos of antibody". With a fermenter running continuously for approximately 40 weeks per year (taking into account the need for space between runs and maintenance time), Genmab could potentially push capacity "close to 400-500 kilos of antibody per year" at a productivity level of 1g per litre, Dr Møller said, "and if you go to four grams per litre, then of course it's four times as much. So there is a lot of capacity in this facility, especially if we stack it up to full-scale capacity". With the 170 staff already in place at the Brooklyn Park facility, Dr Møller noted, Genmab can use 33 per cent of the total production capacity. By adding 130-150 staff, allowing for full-time coverage in two shifts seven days a week, capacity could be boosted to 400-500 kilos of antibody on the basis of 1g/litre in the fermentation process, or five times as much on a 5g/lire basis. Dr Patrick Gage, interim chief executive officer of PDL, said the agreement with Genmab was "the optimal transaction to fully realise the value of our biologics manufacturing facility. Importantly, it also represents another step in delivering on our commitment to maximise the value of PDL's assets for our stockholders, following on the recent sale of our commercial assets." Last December, PDL sold Japan's Otsuka Pharmaceutical the rights to IV Busulfex (busalfan), an oncology product used for conditioning prior to allogeneic haematopoietic progenitor cell transplantation for chronic myelogenous leukaemia, for $200m in cash. Earlier this month, the US company reached an agreement with EKT Therapeutics under which EKR will acquire the rights to PDL's cardiovascular products, Cardene IV (nicardipine hydrochloride), Cardene SR and new formulations of Cardene in development, as well as Retavase (retaplase) and the pipeline product ularitide. In return, PDL gets $85m in cash upfront, up to $85m extra in development and sales milestones for the new Cardene formulations, and royalties on sales of the new Cardene formulations and ularitide.