Los Angeles-based cancer drug maker Abraxis BioScience Inc. has moved its research and development operations to Costa Mesa.
Abraxis BioScience, which makes breast cancer drug Abraxane, moved 100 workers from Marina del Rey last month to a building with laboratories off the San Diego (I-405) Freeway.
The monolithic black building once housed drug maker ICN Pharmaceuticals Inc., now Aliso Viejo-based Valeant Pharmaceuticals International.
With the Costa Mesa move, Abraxis BioScience expects “immediate job growth, to the tune of 25%,” according to Michael Brunelle, the company’s vice president of acquisitions and development.
The Costa Mesa operation could grow more as the company develops drugs, he said.
Some are wondering whether the building could become the headquarters of a planned spinoff, Abraxis Health.
Sometime this year, Abraxis BioScience plans to spin off the drug development unit but hasn’t said where it will be based.
Brunelle declined to comment in the run-up to the spinoff of Abraxis Health.
Abraxis BioScience, which is set to retain Abraxane, plans to keep its headquarters in Brentwood, a company spokeswoman said.
The company moved its research and development group to Costa Mesa because it “wanted to own versus rent,” Brunelle said.
The drug maker’s lease in Marina del Rey was expiring, Brunelle said.
Abraxis BioScience acquired the Costa Mesa building for $30.5 million in 2009 from a group led by Boston-based AEW Capital Management LP. It had been eyeing the building for a few years before that, according to Brunelle.
“The game plan is for Costa Mesa to be the research and development arm,” Brunelle said. “Their primary focus is developing new cancer drugs.”
Abraxis BioScience is taking about 100,000 square feet of the 180,000-square-foot building. The drug maker hasn’t decided if it will bring on a tenant for the remaining space, according to Brunelle.
Valeant renovated the building in 2002 with “pristine labs,” Brunelle said, making the space practically move-in ready.
Abraxis BioScience did a bit of tweaking: It changed the building’s address from 3300 Hyland Ave. to 1588 S. Coast Drive after its entrance was reoriented.
“Honestly, there’s more cachet with South Coast Drive,” Brunelle said.
There still is work to do on the property, including building out another 30,000 square feet of space, a project that’s supposed to be finished this summer.
Abraxis BioScience, which had a recent market value of $2.1 billion, got a boost in March when the company said Abraxane met certain goals in a late-stage clinical trial as a lung cancer treatment.
The trial showed patients who received Abraxane “showed a significant improvement in overall response rate” as compared to those who receive Taxol, a chemotherapy drug that’s the usual first line of treatment for advanced non-small cell lung cancer.
Abraxis BioScience plans to file for Food and Drug Administration approval of Abraxane for lung cancer next year.
Some analysts are skeptical.
Analyst Michael King of Merriman Curhan Ford Group Inc. in San Francisco told Reuters that there was “no real incentive” to use a drug that costs much more than Taxol, which is available in a generic form, in a cost-conscious environment.
Abraxis BioScience hasn’t offered guidance for 2010. Wall Street expects it to post a loss of $86.2 million on revenue of $399 million this year.
The drug maker’s founder and executive chairman, Patrick Soon-Shiong, is among the wealthiest residents of Los Angeles, with an estimated worth of $6 billion. He recently was named the businessperson of the year by the Los Angeles Business Journal.
Soon-Shiong is expected to be on hand in Costa Mesa in the fall for a formal grand opening of the facility.
