Officials Say Fuji’s Purchase of Kalon Boosts Texas’s Biotech Profile

Xconomy Texas — 

A Texas A&M University spinoff has been acquired by Fujifilm Diosynth Biotechnologies, a transaction that helps to secure Texas’s role as an innovation hub for the testing and manufacturing of vaccines for pandemics, as well as cancer drugs.

Terms were not disclosed for the deal involving College Station, TX-based Kalon, which was spun out of A&M as a private company in 2011. Through its 49 percent stake–a stake that will increase to full ownership pending certain milestones—Fujifilm Diosynth will be able to expand its scientific and manufacturing capabilities into viral and cell-culture-based vaccines. Fujifilm Diosynth is a North Carolina-based contract development and manufacturing organization of Fujifilm Holdings, the Japanese conglomerate based in Tokyo. Terms were not disclosed.

The announcement capped off a busy week last week for biotech companies in Texas. On Thursday, Houston-based Bellicum Pharmaceuticals, which is developing a cancer immunotherapy that uses a patient’s own T cells to kill cancer cells, made its public debut in a $140 million initial public offering on the Nasdaq.

Kalon, which will now be known as Fujifilm Diosynth Biotechnology Texas, was created following an investment of $50 million by Texas—including a grant from the state’s Emerging Technology Fund—to build a National Center for Therapeutics Manufacturing at A&M. A year later, the university landed one of three federal contracts awarded by the U.S. Department of Health and Human Services’s Biomedical Advanced Research and Development Authority, or BARDA, to develop and make drugs and vaccines to combat pandemic diseases and bioterror threats. Kalon is the contract manufacturer on that project. Kalon is also working with the University of Texas M.D. Anderson Cancer Center to develop treatments for multiple myeloma.

Initially, A&M had thought to hire a company to manage operations at the manufacturing center, but instead university officials decided to launch their own company for that purpose. “We formed Kalon to operate the facility, and in three to five years, seek an exit if the company is successful,” says Andrew Strong, Kalon’s CEO.

“This is probably the most successful university spinout that didn’t involve IP,” he added.

Kalon currently employs a little more than 100 people; Strong says he expects the company to double in personnel over the next 18 months.

Strong, however, will not be part of Kalon’s future growth. An Aggie civil engineering graduate and a corporate lawyer both in private practice and at the Texas A&M System, he is headed back to his old firm, Pillsbury Winthrop … Next Page »

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