Monday, March 17, 2008

Chelsea waits on Alkermes word about plant plans

By Ryan McBride

The future of a project in Chelsea to expand a drug-making plant -- which has been a beacon of economic hope in the tiny city -- is unclear after clinical trials of inhaled insulin made there were halted late last week.

Alkermes Inc., a Cambridge biotech that owns the plant, had not decided what its plans were for its Chelsea operation early this week, and spokeswoman Rebecca Peterson said the biotech was evaluating how the halted trials for its inhaled insulin would impact operations at the Chelsea facility.

The biotech informed Chelsea city manager Jay Ash of the situation in an e-mail last week but did not inform him of any changes at the plant, he said. "We've developed a strong relationship," said Ash, who hoped to meet with officials from the biotech this week. "I feel like a member of the family who has received bad news."

Like many others, Ash learned last week that Indianapolis-based drug giant Eli Lilly and Co. decided to end a program with Alkermes to develop inhaled insulin for diabetics ­-- the same product behind the expansion at Alkermes' plant in Chelsea, just north of Boston.

Lilly has ended a contract in which it agreed to fund all operating and construction costs related to the production of inhaled insulin at the plant, according to a March 10 filing Alkermes made with U.S. Securities and Exchange Commission.

Though Lilly has pulled the plug on the program, Alkermes hasn't revealed whether it would continue to develop the product without its pharmaceutical partner or abandon the inhaled insulin business. The market potential of inhaled insulin took a blow when pharma giant Pfizer Inc., based in New York, pulled its Exubera inhaled insulin off the shelf in October 2007 due to poor sales.

Ash said the presence of Alkermes in Chelsea has been a major plug for efforts to revitalize industrial sections of the city. The biotech opened its plant at Brickyard Square in 2003 and employs 75 workers in the 100,000-square-foot building, according to the company. A total of 150 workers were expected to be employed at the facility by the end of this year.

Last year, Alkermes announced it would expand the plant to supply more inhaled insulin to Lilly, which had been running multiple Phase 3 clinical trials of the product until last week. The state of Massachusetts has committed $4 million in grants toward infrastructure related to the expansion, and Chelsea has awarded the biotech reduced property taxes. Alkermes is the only biotech in Chelsea, Ash said.