Updated June 7
North Liberty’s proposal to bring a 500,000-square-foot, state-of-the-art manufacturing facility — equal to $650 million in a total capital investment — was narrowly rejected by Scorpion Biological Services in favor of a plan from Manhattan, Kansas.
Scorpion, a contract development and manufacturing organization (CDMO) and subsidiary of NightHawk Biosciences (formerly known as Heat Biologics), broke ground on the project in April. The facility will service approximately 144,000 liters of biomanufacturing capacity across 48 bioreactors and create 500 jobs at an average salary of $75,000 a year.
The partnership with the State of Kansas, local and university affiliates, and a private developer calls for a “new biodefense-focused large molecule and biologics biomanufacturing facility,” according to a press release. “One specific goal of the facility will be to help scale production of ANTHIM, an antitoxin against anthrax.”
The deal is pending local, county and state approval.
Iowa City Area Development Group (ICAD) President Kate Moreland said in an email to the CBJ she was informed the North Liberty plan was deemed “1b” by the site selectors, with the Manhattan package being “1a.”
“From the beginning, [Scorpion] was focused on a community and site that would provide the strongest mix of the following three things: Proximity to a tier one research facility and/or a significant military installation, the lowest possible initial capital expenditure and strong support at the federal congressional level with seamless integration down to local.”
Manhattan, Kansas, is home to Kansas State University, a public land-grant research university. The city is also located about 15 miles from the Fort Riley Army base, which is home of the 1st Infantry Division.
The North Liberty package offered an equally-sized CDMO facility, as well as a short-term 50,000-square-foot “pilot facility to be built or retrofitted to accommodate immediate production needs from a recent acquisition Heat Biologics made,” she explained.
Last month, NightHawk completed the acquisition of Elusys Therapeutics, a commercial-stage biodefense company and the manufacturer of ANTHIM.
The average salary was expected to be $80,000 a year plus benefits for workers at the North Liberty location.
“It was kind of a unicorn of projects,” said Ms. Moreland during an Iowa City Council work session June 6. “We really put the full-court press on.”
Despite North Liberty’s growing population, a competitive incentive package and proximity to the University of Iowa, Integrated DNA Technologies, International Flavors & Fragrances (formerly DuPont), Cargill and related fermentation companies in the Corridor, Scorpion decided to go in a different direction.
“Ultimately, the Kansas package won out,” she said.
“[Scorpion] pointed to a couple very specific things, primarily around the incentive package that we were able to put in front of them,” said Austin Korns, director of business development for ICAD during the council meeting. “There was a couple of ways that [Manhattan, Kansas] framed their incentive package that was more beneficial to them upfront, and they were interested in lowering their initial costs.”
Scorpion is in a very early revenue stage, meaning that incentive package was uniquely attractive – and not something that could be matched by the Iowa plan, said Ms. Moreland.
“That funding for them for upfront costs was critical,” she explained. “That was a state package. That wasn’t something we could necessarily compete with. We didn’t know that at the time but we couldn’t have competed at that level anyway.”
Mr. Korns also stated that Scorpion valued highly the relationships made with Kansas governmental bodies during the bidding process but the vaccine distribution company didn’t shut the door on North Liberty if future expansion opportunities arise.
The Scorpion leadership team considered requests for proposals (RFPs) from 25 states and 200 communities before settling on the Kansas project. The biotechnology company only made two site visits – one of which being North Liberty.
According to Ms. Moreland, the North Liberty site was one of four locations from the ICR region that submitted plans and the ICR was the only region representing Iowa. The group met with Scorpion in Des Moines at the Iowa Economic Development Authority (IEDA) office last June before hosting them in the Corridor in November. They were informed their bid failed in early February.
She stressed the Corridor remains an attractive region for companies in the biotech and medtech sectors, including Scorpion.
“The CEO and leadership team specifically requested a debrief meeting with ICAD, North Liberty and our partners to reiterate their future interest in the region,” said Ms. Moreland in May. “They were extremely impressed with the community and have asked to remain connected with the biotech researchers they were introduced to at the University of Iowa for ongoing collaboration. They have also agreed to share a biotech workforce curriculum with Kirkwood Community College to support further workforce development efforts around biotech in the region.”
Despite missing out on the the development, Mr. Korns said it has “already led to some other leads” with other businesses.
Once constructed, Scorpion projects that the facility will have a billion dollar impact on the State of Kansas.