Bayer Chooses to Remain in City, Boosting Local Economy

Tax Incentive Program Motivated Company to Drop Plans to Outsource Production of Kogenate

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West Coast Bayer Healthcare Pharmaceuticals-Berkeley's largest private sector employer-announced its plan Wednesday to remain in the city and to invest more than $100 million in its Berkeley facilities to manufacture the next generation of the company's hemophilia drug, Kogenate.

The company announced in August it was considering outsourcing work on Kogenate, the only drug manufactured at the Berkeley site, due to economic reasons, said Joerg Heidrich, senior vice president of Bayer's global product supply and head of the Berkeley site.

It was the first time Bayer seriously considered whether or not to continue manufacturing in Berkeley, Heidrich said Wednesday at a press conference announcing the decision.

However, the cities of Oakland, Berkeley and Emeryville worked together with the state government, PG&E and other agencies to create a tax incentive program for Bayer, which motivated the company's decision to stay in Berkeley.

Bayer is already very invested in the neighborhood, Heidrich said, calling the partnership a healthy and beneficial relationship.

"I'm very pleased Bayer will invest more ... in the Berkeley site," Heidrich said. "We hope to breathe new life into San Francisco Bay Area's biotech industry."

Jess Brown, director of service and sales at PG&E, said for the gas and electric company, the decision to help Bayer save money on its electrical expenses was not a difficult one to make. PG&E wanted to keep business in California and has already had a long-standing relationship with Bayer.

Heidrich also cites the employees at the facility as the other major factor in the decision to remain in Berkeley.

"(The decision) is a vote of confidence to the Berkeley team," Heidrich said. "(They) have demonstrated their outstanding knowledge for years."

In addition to being the largest private employer in the city of Berkeley, Bayer is the second largest biotechnology provider in the Bay Area.

The 46-acre Berkeley Supply Center-located in Berkeley since 1992-has been manufacturing Kogenate since the drug's approval in 1993.

The announcement to remain in Berkeley marks the beginning of facility upgrades, along with new equipment and state-of-the-art technology, over the next four years. The investment is the largest ever made by the company in Berkeley, Heidrich said.

For Berkeley Mayor Tom Bates, the company's decision to keep its operations in Berkeley has positive impacts on the future of the city.

"I can't emphasize how thrilled we are," Bates said at the press conference. "Can you imagine what $100 million is going to do for our economy? It's a giant win-win."

The move not only means the retention of many jobs, but it also marks a turning point for Kogenate, as the investment will go towards a new manufacturing process, complete with the application of innovative and first-in-class biotechnology manufacturing products.

The company hopes to produce a future generation Kogenate that would have once-a-week-instead of the current three-a-week-infusions, which would improve the lives of hemophiliacs.

"It means a lot for the region," Heidrich said. "We are ready for the challenge (and) we are committed to being industry leaders."


Contact Denise Poon at [email protected]

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