North Carolina’s life science sector registered another run of robust growth in 2017, ending the year with more than 700 companies employing over 63,000 people. The year was packed with major public stock offerings, billion-dollar acquisitions, venture capital deals, company expansions and accolades for the state’s bioscience prowess.
Two companies go public
G1 Therapeutics of Research Triangle Park and Dova Pharmaceuticals of Durham became publicly traded companies in 2017, collectively raising about $180 million in initial public offerings (IPOs) of stock.
G1, a cancer therapy company that was spun out of the University of North Carolina at Chapel Hill, raised $105 million in its IPO after having raised $95.5 million in venture capital. The North Carolina Biotechnology Center provided the company with $500,000 in loans in 2011 and 2012, helping position it for the follow-on investments.
Dova, focused on developing drugs for rare diseases, raised about $75 million in its IPO only a year after its founding.
Companies leverage NCBiotech funding
Several companies, many that received early-stage loans and investments from the Biotech Center, raised substantial funding from other sources in 2017.
- Locus Biosciences, a Morrisville-based spinout of North Carolina State University, raised $19 million from major investors including Tencent Holdings, the Chinese internet conglomerate, to develop precision antimicrobial drugs that can combat antibiotic-resistant infections. NCBiotech provided $325,000 in early loans to help Locus establish its technology and attract additional investment.
- Humacyte, a Morrisville-based regenerative medicine company bootstrapped with a $150,000 loan from NCBiotech, raised more than $18 million to help test and commercialize its bioengineered blood vessel, Humacyl. The funding followed a $150 million financing round in 2015 ̶ among the largest ever by a life science company in North Carolina.
- Baebies Inc., a Durham company based on technology developed at Duke University, raised $10 million in funding to ramp up commercialization of its newborn screening and pediatric testing products for a range of genetic diseases. The financing followed a $13 million round of equity financing in 2015 and a $500,000 loan from NCBiotech in 2014.
- Piedmont Animal Health, a Greensboro developer of health products for companion animals, gained a strategic equity investment from the life science division of Sumitomo Corp., a Fortune 500 company based in Tokyo. The companies declined to disclose the amount of the investment. Piedmont received a $150,000 start-up loan from NCBiotech in 2003.
- BioFluidica, a Chapel Hill company developing a product using liquid biopsies for cancer detection, raised $4.1 million in a private equity offering. The company, also a UNC spinout, received a $250,000 loan from NCBiotech in 2015.
- NeuroTronik of Durham closed on $23.1 million in preferred stock financing to advance its therapy for treating acute heart failure in hospitalized patients. The Durham venture capital firm Hatteras Venture Partners was a major investor.
Companies plan expansions
Several companies announced major expansions in 2017:
- Corning, the global materials science company known for its glass and ceramics, will create 428 jobs over three years in North Carolina by investing $275 million in a manufacturing plant expansion in Durham County and a new warehouse in Edgecombe County. Both facilities will support Corning’s new pharmaceutical glass packaging product, Valor Glass. NCBiotech supported the expansion with an Economic Development Award.
- Raleigh-based Mako Medical Laboratories, a diagnostic services company, will create 153 jobs over five years in Henderson, where it plans to build a $15.4 million testing facility with warehousing space.
- Pfizer, the global pharmaceutical giant, will expand its vaccine-manufacturing plant in Sanford with a $100 million investment in gene therapy that will add 40 jobs to its workforce.
- Seqirus, the world’s second-largest influenza vaccine company, broke ground for a $9 million expansion of its manufacturing facility in Holly Springs. Seqirus said the construction of a 15,000-square-foot warehouse would enable the company to grow its seasonal flu-vaccine business and support its biosecurity partnership with the U.S. government in pandemic preparedness.
- Fresenius Kabi announced an expansion of its drug-manufacturing operations in Wilson, potentially bringing at least 445 new jobs over five years and $100 million in investment.
- Massachusetts-based Bluebird Bio, a clinical-stage company developing gene and cell therapies for severe genetic diseases and immunotherapies for cancer, acquired a 125,000-square foot manufacturing facility in Durham. This project also will receive up to $100,000 financial support from NCBiotech’s Economic Development Award program if Bluebird meets specific job-creation targets.
- California-based Alexandria Real Estate Equities began developing a multi-tenant research and development campus in Research Triangle Park for agricultural biotechnology. The Alexandria Center for AgTech already has two tenants: AgTech Accelerator Corp., an Alexandria-sponsored incubator that discovers, develops, funds and manages new ag tech companies, and Boragen, an Accelerator-backed company that is developing next-generation fungicides for plant agriculture.
- Cambrex Corp., a contract manufacturer of small molecules and active pharmaceutical ingredients (APIs) for drug companies, said it would invest $2.4 million in an expansion of its pilot plant in High Point to meet growing business demand. The expansion will include a new 400-square-foot reactor suite that will increase the plant’s reactor capacity by 30 percent.
- New Jersey-based Lifestar Pharma, a U.S. subsidiary of Mankind Pharma, one of India’s five largest pharmaceutical companies, bought a 96,000-square-foot facility in Durham for R&D and manufacturing.
Billion-dollar acquisitions announced
- Patheon, a Netherlands-based contract development and manufacturing organization that employs about 1,900 people at facilities in Durham, Greenville and High Point, was acquired by Thermo Fisher Scientific for about $7.2 billion. The deal came a year after Patheon raised $585 million in an IPO.
- The Covance unit of Burlington-based LabCorp, a global giant in diagnostic testing, continued to beef up its capacity in clinical research by acquiring Chiltern International, a privately held contract research organization that has its North American headquarters in Wilmington, for about $1.2 billion.
North Carolina wins accolades
North Carolina won various honors in 2017, affirming its reputation as a leading state for bioscience.
- The business magazine Forbes ranked North Carolina as the nation’s best state for business. An improved employment outlook and the second-lowest business costs for labor, energy and taxes vaulted North Carolina to the top in 2017, after a No. 2 ranking in 2016. The state has been a perennial contender for the publisher’s top rankings, finishing in the top five places for 12 straight years before winning the top spot in 2017.
- A series of reports by the Pharmaceutical Research and Manufacturers of America (PhRMA) highlighted North Carolina’s position as a top state in the nation for driving innovation and economic growth by attracting and growing the biopharmaceutical industry amid an increasingly competitive global environment. The reports pointed to two successful models: the Biotech Center and the state’s system for education and training to help close the skills gap.
- North Carolina won Site Selection Magazine’s Prosperity Cup for 2017, topping all states’ rankings. The publication cited the state’s ability to attract 289 company relocations or expansions in 2016, along with its job creation record, favorable tax climate and business competitiveness.
(C) N.C. Biotechnology Center