Tuesday, March 01, 2005

Alza drug technologies pep up local economy - Company invests $100 million to upgrade its 260,000-square-foot facility and now has 1,000 workers

Article Last Updated: 2/27/2005 07:50 AM

Delivering success
Alza drug technologies pep up local economy
By Barbara Smith/Business Writer

Inside a small vial of clear warm water, a delicate stream of blue fluid escapes through a tiny opening in the covering around the placebo.

Were it inside a human body, the healing process would begin as the medicine is slowly dispensed to an ailing patient.

Such is the state-of-the-art controlled delivery science enhanced over time by a company that has quietly expanded to become the No. 1 private-sector employer in Vacaville.

Alza Corp. occupies a cluster of buildings north of Vaca Valley Parkway just west of Interstate 505, across the freeway from its more celebrated biotech brother, Genentech. Alza's OROS therapeutic delivery system is helping millions of patients each year.

In the meantime, Alza has helped establish Vacaville as a leading biotech hub in Northern California. It is also feeding the city's economic resurgence.

While the company's Mountain View facility is the stage for scientific research to find new drugs, Alza's Vacaville facility is growing at a frenetic pace. It recently invested $100 million to upgrade its 260,000-square-foot facility and now has at least 1,000 workers, making it the largest employer in the private sector, said Mike Palombo, Vacaville's economic development director. The firm is now running three shifts, he said.

"Obviously they are an important player in the economic development in the community, a very important player," Palombo said. "They are certainly one of the leaders of the industrial community."

Palombo said he understands the $100 million in upgrades is partly for the sophisticated equipment that a pharmaceutical company uses, its value equating to more personal property tax dollars for the city.

Over time, equipment and buildings for companies like Alza depreciate. The city likes to see a company retool because it introduces new tax dollars, Palombo explained.

"It essentially rejuvenates the taxes," he said.

Alza has different needs and different rewards compared with Genentech, a biotechnology leader, but they're both high tech companies that Vacaville welcomes, he said.

"We're happy to have them, and we would certainly be happy to have more companies like them, and I don't necessarily mean competition," Palombo said.

Mike Ammann, president of Solano Economic Development Corporation, said Alza's presence and expansion in Vacaville demonstrates to other companies one of the many elements of the local business climate that reinforces the abilities of other companies to grow.

He credits the city of Vacaville for its ability to work with biotechnology companies.

"You could say that the city of Vacaville has made a living from biotechnology," Ammann said. "They know what they need, and they know the critical aspects of development they need for the success of the company."

Solano EDC is a public-private partnership that attracts new employers and industry to Solano County. Its mission to help local community economic development offices attract business to Solano's seven cities.

Firm's like Alza help Solano EDC and the city get commitments from major corporations, Ammann said.

"They are critical to the cluster of biotech companies that have made their home in Vacaville and given us the ability to market to others, Ammann said.

"When you bring a prospect to that area, the decision is kind of made for them by the decisions made by the other companies. There is commonality, and to leads to our credibility."

Also critical is the alignment of the biotech cluster with Solano Community College and other learning institutions to the labor force needed to fill the positions now and in the future, Ammann said.

"These decisions and expansions are based on 10, 20, 30 years ... you don't make these huge investments without having a sustainable labor force and other critical local characteristics," he said. "It's very important to Alza and others that a long-term labor force is available for them to hire locally."

Meanwhile, Alza's 1,000-employee workforce, including engineers, chemists, scientists and factory workers, keep the Vacaville facility operating 24 hours a day, seven days a week, said Joe Nuzzolese, vice president of the Vacaville facility.

Alza is more than making pills. Its new technologies focus on a variety of oral products.

OROS was pioneered by Vacaville's Alza Corporation and prescribed to patients that receive Alza's various drugs, like Concerta. A drug manufactured at Alza in Vacaville, Concerta is one of the pharmaceutical firm's top-selling brands. It was developed for patients afflicted with attention deficit hyperactivity disorder (ADHD).

Concerta comes in a tri-layered tablet, released into a patient's system through an osmotic pump, a pump that pushes the medicine through the porous tablet, gradually releasing medicine over a 24-hour period. The tablet stays intact until the drug is completely dispensed. Few companies have such a delivery system, Nuzzolese said.

"It's not a sustained release, it's a controlled release," he said. "The difference is the profile of the release is engineered inside the tablet."

The Concerta tablet is a three-layer tablet, but is capable of comprising five layers, if necessary.

"It's really very interesting what happens in this facility," Nuzzolese said on a recent tour. "There's a lot of very smart people who work on this stuff every day, from here to Mountain View."

Nuzzolese doesn't try to conceal his excitement when he demonstrates with placebos Alza's successes in pharmaceuticals. Its an excitement shared by employees - from technicians in white coats to warehouse workers.

Among the more dynamic new drug delivery processes at the firm is Ionsys, a credit-card size skin patch that when applied to a patient relieves chronic pain, Alza officials said. Ionsys, a dosing system for acute, post-operative pain, will replace the intravenous pump-and-pull system that dispenses morphine.

"Every time you push the button, it doses you," Nuzzolese said, demonstrating with a placebo. He noted that it does have a control mechanism so people can't overdose.

Nuzzolese said Alza has received an "approvable" letter from the Food and Drug Administration for Ionsys. Final approval is anticipated within the next two years.

"It's actually a tremendous opportunity for this site, and the company," he said. "It's a very innovative product."

Alza is best known for its Nicoderm CQ patch that helps smokers quit the habit, which works much differently than Ionsys. The new product illustrates how the technology has accelerated.

An Ionsys patient can push a button on the patch, activating a tiny battery, similar to that used in a watch, sending the right dosage into the patient's system.

Alza continues to lead the development of drug delivery technology which is used by 30 commercialized products in more than 80 countries. More than 3,000 U.S. and foreign patents are active or pending.

Along with Concerta, one of Alza's big-selling brands is DitropanXL, a drug for those with an overactive bladder.

Its two main transdermal patches are Duragesic, its biggest selling product for chronic pain, and Nicoderm CQ, for smoking cessation.

After Alza was sold to Johnson & Johnson in 2001, the Vacaville facility began to focus on manufacturing. It now produces a couple of products for business partners.

The recent $100 million investment will improve the Alza plant's infrastructure, giving it the capability to grow further.

"This facility is central to a lot of new drug development work," Nuzzolese said. "We have the technology, infrastructure and the people here in Vacaville who are experts at commercializing these types of new technologies."

Nuzzolese notes that Alza is not in competition with Genentech, which is undergoing a $600 expansion. Genentech is a biologics company. But there is a competition to attract the best and brightest from the workforce in the region.

"There's a technical pool that's available in the area and community that we all pull from," Nuzzolese said.

Alza also prides itself in its community involvement, Nuzzolese said.

Beyond its support of the Vacaville Chamber of Commerce, the firm has done a lot from a charitable standpoint, Nuzzolese said, including support for public schools and civic groups. "We do all that because we are a responsible member of the community, and feel that the community can benefit from our participation."

Barbara Smith can be reached at business@thereporter.com.

At a Glance:
Alza Corp.
Pharmaceutical company
Subsidiary of Johnson & Johnson 700 Eubanks Drive, Vacaville
Headquarters: Mountain View
Founded: 1968 by Dr. Alejandro Zaffaroni
Vacaville plant: Constructed in 1986, expanded in 1993 with major upgrade in 2004
Employees: 1,000
Net income 2004: $1 billion
Top products: Duragesic, a transdermal patch and Nicoderm CQ

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