Biopharmaceutical firm plans to close one of its Bay Area plants, lay off 25

A biopharmaceutical company operating in Vacaville for 24 years plans to close one of its two research and development facilities there. This comes after a few years after it bought local land for expansion.

DesigneRx Pharmaceuticals Inc., part of the U.S. arm of the Cayman Islands-based, Taiwan-anchored Polaris Group, notified state and local officials July 20 that it wants to end manufacturing at 4941 Allison Parkway, Suite B, affecting 25 workers. Those layoffs there are set to start Sept. 21 and end by mid-October, according to the filing. Roughly five employees will remain there to decommission the facility and eventually turn it over the the building owner, the document said.

This 45,000-square-foot facility is leased from the Yeh family, who also own Synder Filtration in the same building, according to Eric Dakin of Dakin & Dakin Commercial Real Estate Services. He also represented Polaris/DesigneRx in the 2022 land purchase and the 2023 purchase of an 11,000-square-foot building at 4980 Allison.

“They bought it for growth and expansion to accommodate more engineers and scientists and R&D,” Dakin said of 4980 Allison. The sale price was $2.3 million, according to public records.

The land deal one of several that came out of A.G. Spanos’ sale of about 120 acres in the business park in 2021. Newcomer drug developer Agenus bought the land for about $3 a square foot then sold 15 acres each to Polaris and LG Chem ($20 a square foot), 27 acres to industrial real estate developer Transwestern (around $15 a square foot), and Agenus retained about 66 acres for its own plans, according to Dakin.

DesigneRx has been listing the land, located on Horse Creek Drive, for well over a year and is calling for offers, anticipating a sale price of $10–$14 a square foot. Brooks Pedder of CBRE is taking offers for the Agenus land. LG Chem doesn’t yet have a construction time frame for its planned facility but remains committed to the city, Dakin said. Transwestern continues to look for a company wanting a build-to-suit lease on its land.

“Everyone had good intentions initially. Then the markets shifted and (venture capital) money changed,” Dakin said.

Amanda Portier, Vacaville’s recently hired economic development manager, said the Workforce Development Board of Solano County is assisting the impacted DesigneRx workers. The impact of the pending plant closure on the city’s biotechnology hub, a particular focus for business growth in the county in the past several years, isn’t yet known, she said. Part of the city’s merging of its economic and community development departments at the end of last year was to “better coordinate growth” and “streamline services.”

“The City is currently developing a long-term Economic Development Strategy focused on attracting and supporting key industries, including biotechnology and advanced manufacturing, and we will continue building on partnerships with existing companies and regional organizations to support this effort,” Portier told the Journal in an email.

The Polaris Group’s main U.S. R&D facility is at Polaris Pharmaceuticals Inc. in San Diego. The group, listed on the New Taiwan Stock Exchange under the ticker “6550,” opened the 4981 Allison facility as Polaris Pharmaceuticals in 2005 and in recent years changed the name of the Northern California operation.

The parent company develops novel anticancer treatments, led by Pegargiminase (ADI-PEG 20), an enzyme-based drug. On May 25, the company announced it was suspending its phase 3 clinical trial of ADI-PEG 20 with two other drugs for treatment of leiomyosarcoma, a rare, aggressive cancer that starts in smooth muscles, commonly in the abdomen, uterus or blood vessels. The same day it said it was withdrawing its 2023 Food and Drug Administration biologics license application for ADI-PEG 20 to treat malignant pleural mesothelioma, another rare, aggressive cancer, this one developing in the pleura, a thin lining of the lungs and chest cavity.

Studies are continuing for use of the drug for other conditions.

Also on May 25, the company said its board approved approved “an organizational optimization and workforce adjustment plan” for its U.S. operations, in San Diego and Vacaville, to help “operational efficiency, reduce fixed cost burden, and enable the Company to better focus its resources on core businesses, key product development, and subsequent major operational objectives, thereby strengthening overall capital utilization efficiency.” The regulatory filing said this change wouldn’t affect overall operations or product development.

The number of jobs affected in Vacaville and San Diego wasn’t specified. There were no WARN notices for the San Diego operation as of Thursday. The company hasn’t responded to requests for comment.

The Polaris Group’s doubled from the year before, reaching NT$4.22 billion ($134.4 million).

Jeff Quackenbush joined North Bay Business Journal in May 1999. Reach him at [email protected] or 707-521-4256.