Baxter Has Big Plans for Biotechnology in the Los Angeles Area : Health care: Its goal to turn Hyland Immuno division into an industry leader is expected to add hundreds of jobs.
In a boost for the Los Angeles area’s efforts to become a biotechnology center, Baxter International is planning a major expansion in Southern California, where it hopes to transform its Hyland Immuno division into a biotech industry leader.
Baxter, a medical products company known for intravenous tubing and blood therapies, already has one major biotech product: a genetically engineered blood-clotting factor that is widely used by patients with hemophilia, an inherited bleeding disorder.
Through acquisition, licensing and expanded research and development, Hyland Immuno officials want their unit to compete with such biotech leaders as Amgen, Genentech and Biogen. And they plan to do so in greater Los Angeles, where they hope to take advantage of the area’s numerous world-class academic and nonprofit research centers.
Over the next few years, the commitment by Baxter is expected to bring hundreds of new jobs to the Southland as the company, which has annual sales of $6.6 billion, revs up production at its manufacturing facility in Thousand Oaks and moves senior executives from around the world to Hyland Immuno’s U.S. headquarters, now in Glendale.
In the next decade, employment could increase even more, bringing thousands of additional jobs as Baxter expands its research and development efforts and builds a portfolio of biotech drug products, company executives say.
“We’ve clearly made a decision worldwide for Hyland Immuno to gather people in Los Angeles and set this up as a center for our global operations,” said the division’s president, Thomas Glanzmann, who moved here in August from the company’s European headquarters in Vienna.
California already is home to two major biotech hubs: the San Francisco Bay Area and San Diego. Baxter officials are betting that greater Los Angeles will become the third.
“There are strong opportunities here, better than just participating in existing hubs,” said Norbert Riedel, who heads the division’s genetic-engineering business.
The executives cite Thousand Oaks-based Amgen, the world’s biggest independent biotech company, in discussing the lofty goals they’ve set for Baxter, which, like many large health-care and pharmaceutical companies, is attracted to biotechnology as a source of innovative products. Amgen’s managers showed that it was possible to “garner resources in the region and recruit the talent they need,” Glanzmann said.
The Baxter team talks about opportunities to recruit graduates from UCLA, USC and Caltech and to collaborate with government-funded labs in a region that is near the top nationwide in federal research dollars awarded each year.
In contrast to the greater Los Angeles area, the leading biotech hubs have reached “the point of saturation,” Riedel said. “Look at the San Francisco Bay Area. Look at how many companies are there and . . . the enormous competition in recruiting talent. Sitting between San Francisco and San Diego, we think there’s an opportunity of creating another biotech hub.”
Baxter’s expansion plan may help speed that process. In biotech, growing companies often spawn new companies as seasoned executives and scientists leave to launch their own start-ups.
Baxter, which is based in Deerfield, Ill., has a long history in Southern California. In July, the corporation announced plans to spin off its Irvine-based cardiovascular unit, with $1 billion a year in sales of a broad range of products, including replacement heart valves.
What is now Baxter’s Hyland Immuno division was started in 1935 by a Childrens Hospital Los Angeles physician to supply blood plasma products for the treatment of contagious diseases. Baxter acquired the company in 1952; two years ago, it merged with Immuno, an Austrian company that also specialized in production of blood plasma components.
One of its leading products is factor VIII, for patients with hemophilia. Until recently, the medication was derived exclusively from human plasma. However, infants diagnosed with the hereditary disease are increasingly being treated with the genetically engineered version--a human protein produced in Chinese hamster ovary cells. The biotech version of the drug, called Recombinate, had sales of $500 million last year.
In October, Hyland Immuno won federal approval to manufacture the drug at its Thousand Oaks plant. The drug continues to be in short supply throughout the world. Over the next year or so, the company expects to triple the output of the plant--increasing employment from about 350 employees to 500.
The division also has more than 300 employees at its headquarters in a Glendale high-rise. It expects that number to double over the next several years, Glanzmann said. The company is now looking for a site to accommodate senior mangers transferring to headquarters as well as the new hires needed for its expanding global operations.
Over the next five to 10 years, Hyland Immuno could grow even more, Glanzmann said, increasing its employees by several thousand, from a base of 1,700 in various Southern California locations.
“The blood business continues to be one of the growth drivers behind Baxter,” said Sanjiv Arora, a securities analyst with Dain Rauscher Wessels in Minneapolis. “The demand for one product, factor VIII, is leading the charge right now.”
