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Monday, August 13, 2012, 7:00 am

Biosearch plans big Petaluma expansion

Goal to ‘have space to grow into for the next 10 years’

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    Biosearch TechnologiesPETALUMA — Biosearch Technologies Inc., an early pioneer in developing life science tools, plans to expand to Petaluma to provide room for continued growth.

    In late July, Biosearch Technologies purchased a lender-owned 120,000-square-foot office and industrial building in a south Petaluma business park built in 1987 for Tegal Corp., as that company was growing its business of manufacturing semiconductor chip production machines. Tegal exited that business totally last year and moved to a fraction of that space in downtown Petaluma.

    Biosearch H1N1 ValuPanel

    Biosearch in 2009 received the first license from the Centers for Disease Control for test components that detect the H1N1 virus, or the swine flu. (credit: Biosearch Technologies)

    But Biosearch Techologies has been growing steadily, now having about 120 employees in two 30,000-square-foot Novato buildings and annual sales of around $30 million. At the beginning of next year before the expiration of the lease for labs and headquarters offices at 81 Digital Drive in Novato, Biosearch plans to move about 90 production and administrative employees to the nearly 100,000 square feet of vacant space in the Petaluma building, located at 2199-2201 S. McDowell Blvd. in Oakmead Northbay Business Park.

    “The point of the move is to have space to grow into for the next 10 years,” said Daren Dick, chief operating officer.

    Roughly 30 would remain at the 51 Digital Dr. building. Biosearch Technologies purchased it in 2007 and has been planning to outfit it with labs for production according to U.S. Food & Drug Administration current good manufacturing practices, or cGMPs. Currently, both custom and GMP manufacturing were done at 81 Digital.

    “We’re trying to separate those two things, so we do not push the cost burden of GMP manufacturing to the bulk of what we do,” Mr. Dick said.

    Biosearch Technologies has three vertically integrated parts of the business. The chemical manufacturing group makes precursors for making oligonucleotides, which are synthetic short fragments of nucleic acids such as DNA and RNA. One key product in that group are fluorescent dyes used as markers in gene research.

    The oligo manufacturing group uses custom-built robots to produce the synthetic nucleic acid products on a large scale and with scant variance. This group is further divided into two departments. The custom oligonucleotide manufacturing group makes large numbers of compounds at small scales for use in research and product development. The GMP manufacturing group makes smaller numbers of compounds at much larger scales for diagnostic and other commercial uses.

    Biosearch Technologies new Petaluma building

    Biosearch Technologies purchased this 120,000-square-foot south Petaluma building to house its headquarters and product labs. (credit: Cassidy Turley)

    Manufacturing active components in mass-produced tests for H1N1 (swine flu) and Influenza A viruses requires far more rigorous environmental controls and documentation than for custom products used in research, according to Mr. Dick.

    “We make thousands of unique compounds on the custom side with price tags of up to, maybe, 25 to several hundred dollars,” he said. “Compare that with tens of compounds on the GMP side starting at several thousands of dollars and going up from there.”

    The Novato facilities recently were re-certified under the ISO 9001:2008 quality standard. The company currently makes a product under cGMP.

    Staff at the cities of Novato and Petaluma are reviewing plans for the facilities at 51 Digital and 2199 S. McDowell. Biosearch Technologies wants to open GMP production labs in Novato this fall for full redundancy when the other part of production shifts to Petaluma.

    After both facilities are running, the company wants to pursue medical-device quality manufacturing certification under ISO 13485 by year-end.

    “It’s not required, but our customers prefer us to be,” Mr. Dick said. “It is something we will do for competitive advantage.”

    Biosearch technician Bernarda Angara in a GMP production lab

    Biosearch technician Bernarda Angara handles preparations in a GMP production lab. (credit: Biosearch Technologies)

    Ron Cook, Ph.D., incorporated Biosearch Inc. in 1979. The company developed one of the first automated solid-phase DNA synthesizers and modified it over the years. Nobel laureate Kary Mullis credited the company’s equipment in his development of the polymerase chain reaction, or PCR, method for amplifying genetic samples from just a few strands.

    New Brunswick Scientific acquired the company in 1987 and Biosearch operations passed through several companies before Applied Biosystems retired the product line. The current company, Biosearch Technologies, was founded by Dr. Cook in 1993 and expanded to its current location in Novato from San Rafael in 1998.

    Steven Leonard and Brian Foster of Cassidy Turley brokered the building sale, which closed July 25 for $7 million, or less than $60 a square foot. This sale of one of the last large troubled commercial properties in the city closes a three-year chapter in the history of the local real estate market in which buildings with large vacancies were selling for low prices and pulling down property values.

    At the same time, the reset in property values has provided a boost for Petaluma business activity. A number of companies such as Biosearch have been able to purchase facilities at prices that lower operating costs, and investors such as Basin Street Properties, Cornerstone Properties and PB&J Acquisitions have scooped up hundreds of thousands of square feet at a fraction of replacement cost and offered space at considerably lower lower rents.

    Cotati-based The Fifth Resource is providing industrial design services to Biosearch for the Petaluma building. The company also helped design Tegal’s space in that building.

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