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Amylin’s San Diego Operations Closing

By Bradley J. Fikes

SAN DIEGO — Bristol-Myers Squibb, the drug giant that bought Amylin Pharmaceuticals last summer, plans to shutter its San Diego operations by the end of 2014.

The decision closes the books on one of San Diego’s most famous biotech companies, a pioneer in new diabetes therapies. It also means hundreds of employees will be dislocated and hundreds of thousands of square feet of office and lab space will be put on the market.

“By the end of 2014, we plan to have all work being done in San Diego transitioned to other Bristol-Myers Squibb sites,” spokesman Frederick Egenolf said by email Tuesday. “Beyond that, we will likely have a small number of people working on closing the San Diego facilities by the end of (March) 2015.”

Egenolf said New York City-based Bristol-Myers is closing its San Diego operations to become more efficient, and to eliminate redundant positions.

It’s a familiar story in San Diego: Successful biotech and high-tech companies grow to a certain size. They’re bought by much larger companies from out of the area and are shut down, or gradually dissolved.

That was the fate of Hybritech, San Diego’s first biotech company, purchased in 1986 by Eli Lilly, the Indianapolis drug company.

Although Amylin’s impending closure deprives the region of a biotech mainstay, San Diego’s history suggests that something better could replace it, said UC San Diego’s Mary Walshok, a longtime student of San Diego innovation-based economy.

“It’s not companies that matter, it’s people that matter,” said Walshok, associate vice chancellor for public programs and dean of UCSD Extension. “San Diego’s strength is in the talent that is resident here.”

While Hybritech disappeared, its alumni are still leading, forming and investing in biotech companies. These include David Hale (Santarus), Tina Nova (Genoptix Medical Laboratory), Ivor Royston (Forward Ventures) and Timothy Wollaeger (Sanderling Ventures).

Among the companies emerging out of Hybritech was Amylin itself, inspired by Howard “Ted” Greene, Hybritech’s founding chief executive.

Biotech veteran Joe Panetta took a more somber view.

“It’s a shame to see a company like Amylin not have a presence in San Diego,” said Panetta, chief executive of the life science trade group Biocom.

Panetta said the news wasn’t a surprise, because Bristol-Myers had not given any indication that it intended to expand or maintain Amylin’s presence in San Diego.

And while new companies will undoubtedly emerge from Amylin alumni, Panetta said, the more immediate concern is finding jobs for those laid off.

About 420 people now work at Amylin in San Diego, said Egenolf, the Bristol-Myers spokesman. When appropriate, these employees will be considered for relocation if they are interested. Those being laid off are being offered severance packages and help finding other jobs.

Outside San Diego, Amylin employs more than 300 people in Ohio and nearly 400 at various locations in field-based sales and medical roles, Egenolf said. These positions will be brought into Bristol-Myers.

Total employment at Amylin at the time of the acquisition last summer was about 1,250, The current total is about 1,100.

Legacy

Hybritech alumnus Wollaeger, an Amylin founder, said the company leaves a legacy of one of the few local biotech companies that brought a truly meaningful drug to market.

“Amylin was a continuation of the biotech revolution started by Ted Greene and the team that he put together at Hybritech,” Wollaeger said.

Founded in 1987, Amylin endured years of setbacks before becoming one of San Diego’s largest biotech companies. It came close to going under in 1998, when Johnson & Johnson canceled a drug development deal.

Amylin found success with the 2005 approval of Byetta, which helps diabetics better control their blood sugar levels. Byetta, injected twice a day, was derived from a protein in the saliva of the Gila monster.

Wollaeger said his diabetic brother, Dan, was helped by the breakthrough drug.

“My brother got on it. He’s now 72, he’s lost 70 pounds on Byetta, and you wouldn’t know he’s the same person,” he said. “I’m sure Byetta saved his life.”

In 2011, Amylin received European approval to sell a newer extended-action form of Byetta. Called Bydureon, it is injected just once a week. Last year, Amylin received approval to sell Bydureon in the U.S.

Bydureon sales could peak at $1 billion a year, analysts estimate.

Attracted by Amylin’s products, Bristol-Myers teamed up with British drug maker AstraZeneca to buy the company last year. Bristol-Myers paid $5.3 billion cash and assumed a $1.7 billion obligation of Amylin’s to Eli Lilly & Co. AstraZeneca paid $3.5 billion for half the profit from Amylin’s drugs.

Flooding the market

Shortly after the purchase, rumors began circulating that Bristo-Myers planned to shutter Amylin’s operations because they were unnecessary in light of Bristol-Myers’ own extensive properties.

In March, the company offered Amylin’s 266,000-square-foot headquarters in the University City area for subleasing.

About 86,000 square feet is available immediately, according to a brochure from leasing agent Jones Lang LaSalle. An additional 180,000 square feet becomes available in May 2014, the brochure says. Most of the property in the four buildings consists of office space that’s not biotech-specific. About 63,000 of that space, available in May of next year, consists of lab space. The master leases on the property expire at different times, beginning Jan. 31, 2015, and ending on July 31, 2019.

Jones Lang LaSalle declined to comment.

The sublease was the first public indication that Bristol-Myers is winding down Amylin’s operations, said Craig Knox, senior vice president of Hughes Marino, a leasing agent that only represents tenants.

“Amylin has already subleased hundreds of thousands of square feet of space and those leases will be expiring in the next couple of years, meaning even more of their space will be back on the market soon,” Knox said on Tuesday.

While that new inventory poses a headache for those leasing property, it’s good news for tenants in the University City area, Knox said. By “flooding” the Class B market with property, the subleasing will drive down rents.

Click here to read the original article in U-T San Diego.



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