SurModics Inc (SRDX)

[DewDiligence]

SurModics Purchases Additional Facility to Expand Brookwood Pharmaceuticals' Development and Manufacturing Capacity

[This facility will be used to manufacture clinical materials for I-vation.]

http://biz.yahoo.com/bw/080423/20080423006351.html

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Wednesday April 23, 4:04 pm ET

EDEN PRAIRIE, Minn.--(BUSINESS WIRE)--SurModics, Inc. (Nasdaq: SRDX ), a leading provider of surface modification and drug delivery technologies to the healthcare industry, announced today that its Brookwood Pharmaceuticals subsidiary, located in Birmingham, Alabama, has acquired an additional facility in the Birmingham area. This new facility will expand Brookwood’s capacity for research and development activities and clinical manufacturing in support of customer projects. Additionally, the building will be SurModics’ corporate center for commercial GMP manufacturing of drug delivery products for pharmaceutical and biotechnology customers.

“Customer interest in Brookwood Pharmaceuticals’ drug delivery technologies and product development and manufacturing capabilities has never been stronger, as evidenced by the record revenue reported from Brookwood in the second quarter of fiscal 2008," said Bruce Barclay, president and CEO of SurModics. “The facility expansion we are announcing today is designed to support this growing interest in both R&D and manufacturing services at Brookwood, and serves to highlight the strength of our business and the optimism we have in its future. In addition, we plan to manufacture the late-stage clinical trial and commercial I-vation™ TA Intravitreal Implant product for our customer Merck & Co., Inc. in this facility. With an anticipated total investment of approximately $30 million in the facility and associated renovation, we will be constructing a world-class facility to develop and manufacture drug delivery products to improve patient outcomes around the world.”

“Our pharmaceutical and biotechnology customers work with Brookwood specifically because of our drug delivery technology and capabilities, as well as our commitment to manufacture clinical and commercial product on their behalf,” noted Arthur J. Tipton, Ph.D., vice president of SurModics and president of Brookwood Pharmaceuticals. “When this expansion is complete, we will be fully equipped to help customers with product development and supply at every stage from early feasibility to production of marketed products. We have been evaluating various facility options over the past year, and have received tremendous support at the city, county and state levels. This particular building was selected because it will accommodate the manufacturing of large-scale pharmaceutical products needed by our customers. If customer projects continue to progress as expected and we maintain our execution against the business plan, Brookwood’s employee population could reach roughly 300 over the next three to five years.”

"This is great news for Alabama," said Governor of Alabama Bob Riley. "Alabama has been making great strides in the biotech and research industry. We are becoming one of the fastest growing areas in the country for biotech research. Brookwood's decision to expand here will help us to recruit some of the brightest researchers in the country to our state. In addition, Alabama already has in place a dedicated and well-trained workforce. We are pleased to be a part of this exciting new industry."

“We are delighted that Brookwood Pharmaceuticals will expand with a new production facility in our community. This is a great example of cooperation between the city, county and state in efforts to support Brookwood in their expansion,” commented Bettye Fine Collins, president, Jefferson County Commission in Birmingham.

“I am excited with Brookwood’s expansion in Jefferson County and elated at the cooperation of state, county, and city entities to produce this significant achievement. Brookwood’s leading position in the polymer-based drug delivery industry is a definite asset to our community. The new jobs created by Brookwood will broaden the county's employment opportunities in the higher wage technology sector I have long advocated as vital to growth in Jefferson County,” said Jim Carns, Jefferson County commissioner and chairman of the Committee of Economic Development in Birmingham.

"With the expansion of Brookwood Pharmaceuticals, the Oxmoor area becomes the city's high-tech corridor,” said Larry Langford, mayor of Birmingham. “This gives us a major recruiting tool as we work with the University of Alabama at Birmingham to enhance our pharmaceutical research and manufacturing role. We are very pleased that Brookwood and SurModics chose Birmingham as an expansion site and we look forward to working with them for many years to come.”

Brookwood was a subsidiary of Southern Research Institute until the acquisition by SurModics in July 2007. Jack Secrist, CEO of Southern Research said, “We are delighted that Brookwood is undertaking this important expansion. Additional facilities needs were an integral part of our discussions during the transaction and we are pleased to see SurModics making this major investment in our community.”

The pre-existing facility, with both office and warehouse space, is located at 750 Lakeshore Parkway in Birmingham and is less than one-half mile from Brookwood’s current headquarters. Build-out to support a number of existing programs is planned immediately. Additional expansion, as dictated by business growth over the next several years, will allow for eventual consolidation of all of Brookwood’s operations into this facility. When completed, SurModics expects direct support from the state and local governments of several million dollars. In addition, the investments in the facility will qualify the Company for other tax incentives.
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