October, 2001
  Incentives Deal of the Month
   from Site Selection's exclusive New Plant database

New Jersey Mixes Right RX to Land GeneProt's Relocated HQ, R&D/Production Facility

GeneProt Geneva
GeneProt on April 26 opened a 50,000-sq.-ft. (4,500-sq.-m.) facility (pictured above) in Geneva Switzerland, that was the world's first large-scale proteomic R&D center.
By JACK LYNESite Selection Executive Editor
of Interactive Publishing

NORTH BRUNSWICK, N.J. -- Directions: Remove incentives from state package, mix generously with pharmaceutical cluster and high-powered academic institutions. Shake well, place mixture in technology center for best long-term results.
        What do you get with such an ostensibly strange brew? What New Jersey has gotten is the relocated headquarters of hot biotech startup GeneProt. In addition, GeneProt will open an R&D/production facility that will be the first large-scale U.S. operation focused on the fast-growing field of proteomics - the separation and analysis of proteins.
        Both the headquarters and R&D/production facilities will be located in New Brusnwick. Together, the two projects will create some 150 high-end jobs, according to GeneProt officials.
        And the projects have ample potential for future job generation. Only19 months old and currently comprised of less than 100 employees, GeneProt is a still-small company that's making big noise.
        The company's strong performance in part reflects its niche clout. Scientists consider proteomics - the systematic separation, identification and characterization of the proteins present in tissue samples and biological fluids - a key in discovering and developing therapeutic proteins, drug targets and diagnostics.
"The state of New Jersey has awarded GeneProt numerous incentives, including a generous construction allowance in excess of $6 million," said GeneProt CEO Cedric Loiret-Bernal (pictured above).

        "Proteomics promises to open a window onto the intimate details of the roles proteins play in several diseases," said GeneProt CEO Cedric Loiret-Bernal.
        Moreover, GeneProt is moving rapidly to capitalize on that window, fueled by US$122 million in institutional and corporate funding. The two New Jersey projects follow GeneProt's April 26 opening of a 50,000-sq.-ft. (4,500-sq.-m.) facility in Geneva, Switzerland, that was the world's first large-scale proteomic R&D center.
        "Some companies just entering the proteomics industry say they'll be able to provide candidates for clinical testing within a few years. We believe we will deliver potential therapeutic agents within six months," said co-founder Denis Hochstrasser, a member of GeneProt's Board of Directors and chairman of its Scientific Advisory Board.

'Generous' $6 Million Construction Allowance

Incentives were certainly one reason why GeneProt's projects landed in New Jersey, company officials said.
        "The state of New Jersey has awarded GeneProt numerous incentives, including a generous construction allowance in excess of $6 million," Loiret-Bernal noted. "This greatly supports our speed-to-market strategy and allows us to apply resources elsewhere - for example, in recruitment and R&D."
        GeneProt will also receive a state Business Employment Incentive Program (BEIP at www.njbrc.org/finance/beip.html) grant with an estimated value of $3.27 million over a 10-year span. The BEIP grant amount is based on the total state income taxes expected to be paid by the new employees that GeneProt plans to hire.

Getting Proximity to Partners, Universities

But like most deals that matter, there was much more than money behind the decision. GeneProt officials said that the company chose the North Brunswick site because of its close proximity to current and prospective partners, mainly pharmaceutical companies, and the area's access to leading academic institutions.
        Pharmaceuticals are to New Jersey what automobiles are to Michigan: the state's economic linchpin. The state's largest manufacturing employer, New Jersey's pharmaceuticals sector employs some 55,000 workers. Fifteen of the world's 20 largest drug companies have major facilities in New Jersey; five - Bristol-Myers Squibb, Johnson & Johnson, Merck, Pharmacia and Warner Lambert - are headquartered in the state. Last year, 12 of the 33 drugs approved by the U.S. Federal Drug Administration were credited to New Jersey-based pharmaceutical companies.
        Significantly, Novartis (www.novartis.com), a key GeneProt partner, has its Consumer Health Division headquartered in Summit, N.J., only 28 miles (47.6 km.) from New Brunswick. GeneProt late last year entered into a five-year "strategic collaboration" with Novartis to analyze proteomes samples. Novartis intends to use the information GeneProt generates to obtain potential therapeutic proteins, drug targets and diagnostic biomarkers. As part of the agreement, Novartis purchased $43 million of GeneProt's preferred stock and agreed to pay GeneProt $41 million by 2003.
        Another major location factor was the New Brunswick site's access to the high-powered academic cluster along Route 1, stretching between Rutgers University and Princeton University, GeneProt officials explained. That location puts GeneProt's facilities in the heart of New Jersey's "Research Corridor." The Route 1 corridor now ranks second only to Silicon Valley in the number of U.S. patents registered each year, according to federal statistics.
        "Clearly, by building North America's first large-scale proteomics discovery center here in North Brunswick, GeneProt will enjoy a thriving business environment and will add to the history of innovation and leadership in new technologies that New Jersey enjoys," said Charles Hance, secretary and CEO of the New Jersey Commerce and Economic Growth Commission (www.state.nj.us/commerce).
        Proximity to major academic institutions is a key element in GeneProt's strategy. Though small, the company has formed a number of mutually beneficial partnerships by leveraging its considerable reputation (it has two Nobel Laureates on its advisory board, for example).
        In Switzerland, for example, GeneProt is working closely with the Swiss Institute of Bioinformatics in the Geneva Medical Universities. The University of Geneva, in fact, licensed its 2D procedure (known as a "molecular scanner") to GeneProt. The 2D technology may be an important weapon in separating plasma and tissue samples into thousands of sub-fractions.

Projects Will Locate at
Technology Center of New Jersey
Tech Center of New Jersey
GeneProt will relocate its headquarters from Evanston, Ill. to the Technology Center of New Jersey (pictured above) in New Brunswick.
GeneProt's new U.S. facilities will be located in the Technology Center of New Jersey. The center is owned by the New Jersey Economic Development Authority (NJEDA at www.njeda.com), which began developing the 50-acre (20-hecatre) tract in 1995.
        GeneProt's R&D/production facility will be located in the Technology Center's newest facility. The company will occupy 60,000 sq. ft. (5,400 sq. m.) of the 80,000-sq.-ft. (7,200-sq.-m.) building, still under construction after its April groundbreaking. The NJEDA finances up to $100 per sq. ft of tenant improvements in the Technology Center.
        GeneProt will build an additional four-story, 40,000-sq.-ft. (3,600-sq.-m.) office for its corporate headquarters. As part of the deal, GeneProt also secured an option to expand further within the Technology Center if the company grows as it anticipates.
        GeneProt will join a Technology Center corporate clientele that includes Advanced Care Products, a Johnson & Johnson subsidiary; the headquarters of Merial Limited, jointly owned by Merck and Aventis; and Rutgers, which has based its IR-4 agriculture research project at the New Brunswick site. "GeneProt will significantly add to the concentration of brainpower at the Technology Center and the commercialization of tested ideas," said NJEDA Executive Director Caren Franzini.

World-Class Computing Power

High-tech players Cambex and Chubb Computer Services will also be among GeneProt's neighbors in the Technology Center. GeneProt's R&D/production facility certainly won't be out of place; it will contain world-class computing power.
        GeneProt's Geneva facility, for example, is ranked as the world's 16th most powerful computing site by Gunter Ahrendt Purchasing Consulting. The Swiss facility uses AlphaServer systems, the technology that helped map the first draft of the human genome, along with Compaq's Tru64 UNIX operating system. The New Brunswick R&D/production facility will use similar technology, according to GeneProt executives.
        Compaq is among GeneProt's "technology partners." Drawing from the $100 million Genomics Investment Program that it unveiled last September, Compaq has made an equity investment in GeneProt. Compaq ranks as the global leader in the life sciences technical computing market, with a 37 percent market share in 2000, according to International Data Corporation (www.idc.com).
        The Compaq alliance is also part of GeneProt's leveraging strategy to add both resources and speed.
        "GeneProt selected Compaq as its preferred IT supplier because of Compaq's leadership in supplying high performance enterprise IT systems and services to the genomics market," said Loiret-Bernal. "A key element to our being able to open our Geneva facility so quickly was the ability of Compaq to install the server facility according to our very demanding installation time schedule."
        GeneProt officials anticipated that their new facilities in New Jersey will be fully operational "by early 2002." In the interim, the company has leased 3,200 sq. ft. (288 sq. m.) of temporary space in the Technology Center.



©2001 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.