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Cuomo calls $200 million Athenex biotech plant a ‘game-changer’ for Dunkirk

DUNKIRK – This blue-collar Chautauqua County city, battered in recent years by plant closings and population loss, enthusiastically welcomed Gov. Andrew M. Cuomo’s announcement Thursday that the state is spending $200 million to build a state-of-the-art drug-manufacturing plant that will create 900 jobs here.

Elected officials and people who work with Dunkirk’s unemployed and underemployed say the plant, if it reaches it full potential, could offset the blows the region has suffered from the closings of ConAgra’s plants in Dunkirk and Fredonia and the mothballing of NRG Energy’s coal-fired power plant in Dunkirk.

“I’m so excited. We need this,” said Silvana Bajdas, branch manager for Infinity Resources Staffing Services, a temp agency in Dunkirk, who attended the Cuomo event. Her husband, Robert Sr., was a forklift operator for ConAgra for 20 years. He lost his job a year ago and was out of work for four months.

The governor visited this city of 12,000 on the Lake Erie shoreline to unveil details of a partnership between the state and Athenex, a Buffalo biotech firm, that also includes the state spending $25 million on a North American headquarters for Athenex on the Buffalo Niagara Medical Campus in Buffalo.

In return, Athenex will spend $1.6 billion over 10 years and expects to create 1,400 total jobs — 700 of its own workers and 700 indirect jobs with suppliers and other companies — with 500 of those jobs at, or supplying, the medical campus headquarters. Athenex is a specialty cancer drug startup that has pursued an ambitious expansion plan in recent years in the United States and Asia.

Cuomo said the project would help the region’s transition from the low-skilled manufacturing economy of the past to the advanced-manufacturing economy of the future.

“It is a game-changer for Dunkirk,” he said before a crowd estimated at 600 that filled the Dunkirk High School auditorium.

Two years to build

The heart of the project is the state’s plan to build a 300,000-square-foot, drug-manufacturing plant in Dunkirk for Athenex.

The project follows a model that Cuomo has used with economic-development projects in Buffalo, in which the state spends the money to construct the building on behalf of its corporate partner, and the company promises to hire workers to operate the facility.

Athenex will hire 450 workers for the plant, and it expects suppliers will create 450 indirect jobs tied to the plant, Howard Zemsky, president and CEO of Empire State Development, said after Thursday’s event.

The Athenex plant will manufacture sterile, highly potent cancer drugs in a specialized, controlled environment for shipment around the world. The plant also will produce cancer pharmaceutical products.

No drug-making plant of its sophistication has been built in the United States in the last 15 years, said Alain E. Kaloyeros, founding president and CEO of SUNY Polytechnic Institute, which oversees the state’s major economic-development initiatives in the region, such as the SolarCity solar-panel factory in South Buffalo.

“And when we say state of the art, we mean it,” Kaloyeros said.

Construction on the plant could take 18 months and it could be ready to open in about two years, Zemsky said. The plant would be built on a stretch of Route 5 in the Town of Dunkirk, just northeast of the city, known as Lake Shore Drive East.

The governor’s budget proposal includes a $200 million line item to fund construction of the Dunkirk plant.

The money still must be approved by the State Legislature, and Cuomo vowed Thursday not to sign any budget bill that didn’t include the $200 million for the plant.

Unlike the governor’s other major economic-development projects here – SolarCity, IBM’s innovation center, Albany Molecular Research Inc.’s drug discovery hub – the Dunkirk plant is not funded through the governor’s Buffalo Billion program. However, the $25 million for Athenex’s North American headquarters in the Conventus building in Buffalo’s medical corridor is part of the Buffalo Billion. Athenex plans to hire 250 workers in the headquarters and suppliers would add 250 more, Zemsky said.

In addition to serving as its headquarters, Conventus also will serve as a product development center and a pilot plant for products that later would be made in Dunkirk, according to the state. Construction on the lab space will begin soon and be completed later this year.

The $1.6 billion over 10 years from Athenex would go toward workers, materials and supplies.

Not everyone is a fan of Cuomo’s use of state funding to leverage investment from the private sector.

“Governor Cuomo has really rolled out the red carpet for this Chinese-controlled company by yet again showcasing New York’s version of state-run economics. It’s risky, we can’t afford it, and it’s not a real strategy,” said Reclaim New York, a nonprofit that advocates anti-tax, free-market ideas.

Started at UB

Biotech industry leaders have long eyed Athenex, formerly Kinex Pharmaceuticals, as a potential powerhouse for the region.

The company, founded in 2003, grew out of research conducted by David Hangauer, a longtime associate professor of chemistry at the University at Buffalo, now retired. UB played a role in the company’s early development and holds equity in Athenex.

After raising $18 million from local investors, the company began to pursue an ambitious, international expansion strategy, fueled by tens of millions of dollars raised from investors in Asia. The company acquired or made licensing agreements with several pharmaceutical companies, including QuaDPharma, giving it access to market-ready drug ingredients and drug candidates. It now has 325 employees in Buffalo, Newstead, New Jersey, Texas, Hong Kong, Taiwan and China.

At Thursday’s announcement, Athenex CEO Johnson Lau said advanced, life-saving cancer drugs will be developed in Western New York and shipped all over the world.

“We are here to make a difference,” Lau said.

Dedicated workers

Local officials say the jobs the plant promises to create are desperately needed in a region hit hard by plant closings and unavoidable economic forces.

Athenex will find out how dedicated local workers are, said Rep. Tom Reed, R-Corning.

“They will give their blood, sweat and tears to this operation,” Reed said at the high school.

At the Erie 2-Chautauqua-Cattaraugus BOCES, Josh Tedone, a program operations specialist, said about half the adults his office works with, either on English as a second language or to get their high school equivalency diploma, are unemployed. The office tries to help them in their job searches, and Tedone said he views the Athenex news as a real boost for the city.

Further, he said, too many SUNY Fredonia and Jamestown Community College graduates have to leave the area for work opportunities.

“I’ve been concerned for years about this community sending away its best and brightest,” Tedone said.

email: swatson@buffnews.com