IRVINE, Calif.—In announcing plans by its Columbia, Md.-based subsidiary K-D Medical to acquire a new facility with two validated, class 100 clean rooms, CalbaTech not only had expanded manufacture of products on its mind, but also the opportunity to profit by leasing part of the new space to other companies—some of whom could be engaged in drug discovery efforts.
Previously, K-D Medical's facilities consisted solely of a 7,000 square foot operation located between Baltimore and Washington, D.C., near the National Institutes of Health (NIH)—for which K-D Medical is a "primary vendor," according to CalbaTech. That facility, like the new one, has two clean rooms for sterile production, as well as a room for contract medical packaging, a warehouse and a walk-in cold box.
Of direct and primary interest to K-D Medical and its parent company, CalbaTech, is that the additional space will provide for expanding the current custom product offerings and better serving the needs of both existing and new customers, including drug discovery companies, drug production operations, universities, government agencies and others in the pharmaceutical market.
K-D Medical's founder, John Powers, adds that the new clean rooms—along with a complete quality control laboratory at the new facility—will also allow the company to manufacture higher quality products.
"This is a very good position for us, as we increase sales to the National Institutes of Health, major universities and pharmaceutical companies," Powers says.
In addition to expanding its manufacturing and client service capabilities, K-D Medical is also looking forward to leasing opportunities. One of the new clean rooms will be used solely by K-D, while the other one will be usable by contract customers.
"These new facilities allow K-D Medical to open new manufacturing and clean room leasing opportunities with pharmaceutical and other companies, opportunities that did not exist prior to this," says James DeOlden, chairman and chief executive officer of CalbaTech. "We are very bullish on our subsidiary's future."
"There are two types of potential customers for K-D through the new facility," Powers reports. "First, the incubator company who needs clean room operation capability and second, the large pharmaceutical company who may want to run prototype or small batch productions for research use only."
K-D will offer the opportunity for companies to utilize the approximately 1,000 square feet of available class 100 clean room, along with the adjacent 4,000 square feet of fully furnished and fitted laboratory space, Powers says, adding that the facility is ISO 9002 certified and FDA compliant.
"K-D is of the belief that a need exists for various companies who cannot afford the capital expense of approximately $100,000 to establish this type of high-end clean room and laboratory," Powers explains, "or who believe that such space rental at the K-D facility would allow them to maximize their existing production facilities, and to do so in our facility on a daily, monthly or annual basis."
CalbaTech provides products and platforms to the biotech and pharmaceutical research market and to academic institutions, while K-D Medical is focused on manufacturing bacterial and yeast growth media, microbiological biological buffers and reagents. As of the filing of its 10KSB documentation in May, K-D Medical's production was more than a half million liters of molecular biology reagents and buffers and nearly three quarters of a million bacterial and yeast biological media products yearly—which were sold to "every major pharmaceutical company" in the United States, according to CalbaTech.
The announcement of the new facility acquisition was followed a day later by CalbaTech's announcement that its overall corporate revenues for the six months ended June 30 totaled $625,345, up from $58,217 for the same period in 2004.
That announcement also had good things to say about K-D Medical, particularly in relation to another CalbaTech subsidiary, Molecula, which provides antisense oligonucleotides to researchers worldwide.
"We are confident that Molecula and K-D Medical will continue to complement each other and that our cross-marketing plans will allow these two subsidiaries to generate $1.5 million in revenues in the current fiscal year," DeOlden noted in the revenue announcement.
