CMC Icos Biologics is putting the brakes on its big expansion plan. The Bothell, WA-based operation, which manufactures biotech drugs under contract to other companies, said today it is postponing its growth plan announced in September because of the deepening recession.
“With the current challenges of the global economy, we must carefully manage our resources to best mitigate our and our customers’ risk while still ensuring that we can grow our operation,” said CMC Icos president Gustavo Mahler in an e-mailed statement.
This will take away one of the few bright spots in the local biotech job market, which has been reeling with layoffs. CMC Icos, a unit of Denmark-based CMC Biologics, said in late September it planned to double in size in Bothell, to about 250 employees. The company had reason to be optimistic. It sees growing demand for biotech drugs, which are made through a complex fermentation-like process in living cells. Once that process is up and running, customers are often reluctant to switch to another contractor, providing some stability to the business, Mahler said in an October interview. CMC Icos also anticipates that the availability of “biosimilar” drugs, or cheaper generic copies of these drugs, should boost demand for manufacturing capacity even more, he said.
Back in October, I got the sense from Mahler that this wasn’t quite a done deal. The financial crisis was in the headlines, and CMC Icos hadn’t settled on a construction start date. It was seeking financing for the expansion, and keeping a close eye on how the turmoil might affect its customers, Mahler said at the time. I guess we have the answer now, and it’s not encouraging.