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WisBusiness: SAFC fast-tracks new pharma manufacturing plant in Verona
1/22/2009

By Brian E. Clark
For WisBusiness.com

MADISON – Nearly two decades ago, a start-up company named Tetrionics opened in a lab on Science Drive in University Research Park with one employee working on Vitamin D ingredients.

It struggled until around 1996, when it began working on a compound for Abbott Labs that eventually became an approved drug called Zemplar, which is used to treat patients on kidney dialysis. 

Revenues climbed and Tetrionics was sold to St. Louis-based SAFC Pharma in 2004. The company is now in the process of building a 50,000-square-foot drug manufacturing plant in the Verona Technology Park that will focus on producing cancer-treating compounds.

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Dennis "Doc" Young is in charge of the building process for SAFC.  He said the plant should be finished by November and "validated" several months later by SAFC officials for FDA acceptance. Forecasts call for it to manufacture about $10 million in product during 2010, he said.  

"This plant will allow us to produce batches five times as large as we can produce now in Madison," he said.

Flad and Associates is the architectural firm that designed the building. Affiliated Engineers designed the processing piping and Vogel Brothers is the contractor , he said.

The Verona plant will have 40 employees during its first phase and room to expand, he said. In addition, the Verona plant will require the hiring of several more employees in Madison. SAFC Madison now has roughly 80 workers, with another 1,200-plus in other locations in Wisconsin.

Young, who is director of operations for the Madison division of SAFC, said the new plant nearly went to Sheboygan, where the parent company has a large amount of land and another manufacturing facility.

He and others convinced the SAFC board to keep it close to Madison, however, so the plant can coordinate its efforts easily with researchers and officials at its 38,000-square-foot University Research Park facility.

"We wanted to make sure we could capitalize on the regulatory staff and procedures we have in place (in Madison) that could be mirrored at the new facility without having to duplicate that process," he said.

Young, who began with Tetrionics in the mid-1990s, said timing was good for the Verona facility. Planning began about 18 months ago and it was approved by SAFC's board before the current economic recession kicked in full force. He said financial incentives from the state Commerce Department -- nearly $300,000 in Enterprise Development Zone tax credits -- and inclusion in a Verona TIF District also helped cement the deal.

"This process has gone exceedingly quickly," he said. "We got initial approval from corporate in mid-2008, we finalized and purchased the land in August and broke ground in October.

"There have been some challenges trying to coordinate a lot of activities in a short period of time," he said. "We needed to have some flexibility in design and implementation, but we've been pleased with the project."

He said SAFC is thinking about adding on to the plant, but he said that will depend on customer demand.

Young said the plant will cost a little more than $30 million and is expected to be finished at or below budget, in part because the recession has lowered some construction material costs.

"We've seen some softening (of prices), but not as much as we'd like to," he said.

Young also described Madison as a good place for his company to do business.

"There is a great labor pool with the university system," he said. "We've also been able to use the University of Minnesota for hiring scientists. And Madison is still a good place to live, so we've been able to attract some quality people."
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