AveXis aims to open Longmont plant by year end amid data probe

Note: listen to our discussion about Avexis and its wider impact on KUNC’s Colorado Edition. The segment begins at 12:20.

LONGMONT  — AveXis Inc. plans to start producing gene-therapy drugs at the former AstraZeneca plant in Longmont at the end of the year, as regulators continue to scrutinize a data-manipulation scandal over its flagship drug.

The Swiss drug company is currently preparing a six-building, 692,00-square-foot manufacturing campus in Longmont that was inactive for three months as its latest drug-production plant. It bought the property in March for $30 million, according to Boulder County property records, and received $1.9 million in economic incentives from the Longmont City Council in June.

The site was formerly owned by AstraZeneca PLC (NYSE: AZN), which closed down production there and at its Boulder facility in January. It took a $34.5 million loss on the sale and laid off 210 staff.

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Colorado site head Sally Dyer said the plant has hired back about 150 former AstraZeneca employees, and plans to hire 90 more staff through the end of the year and in early 2020. She said the employees have the skill sets to quickly switch from biologics, which AstraZeneca produced before, to the company’s gene therapies.

“The working environment is the same, but the technologies are different,” she said. “We have the experience that AveXis brings to help get the staff trained to do that.”

The site will produce 40 percent of the company’s output of its flagship drug Zolgensma, a gene therapy for children up to the age of 2 with certain types of often-fatal spinal muscular atrophy.

AveXis president Dave Lennon said the company isn’t interested in acquiring AstraZeneca’s Boulder plant, as it has enough room to expand on-site.

That additional space could be used to house production of other drug candidates for clinical use next year, develop therapies from parent company Novartis (NYSE: NVS) or  produce licensed drugs from other pharmaceutical companies.

“We believe this could be one of the world’s largest gene-therapy sites for production,” he said.

AveXis and Novartis have been under significant scrutiny in the biopharmaceutical world over the past several days after the U.S. Food and Drug Administration announced the company discovered two executives had manipulated clinical data for Zolgensma. The drug, which was cleared for market in May, sells for $2.1 million per dose.

While the FDA did not pull the therapy off the market because the data manipulation was limited to non-human trials, it said AveXis knew about the data manipulation before the FDA signed off on the therapy. The regulatory agency said it may pursue civil or criminal penalties.

On Monday, U.S. Senate Finance Committee Chairman Chuck Grassley (R-Iowa) launched a panel investigation into the manipulation claims, while several Senate Democrats sent a letter to the FDA demanding it heavily penalize the company.

Brian Kaspar, the company’s former chief scientific officer, and his brother Allan Kaspar, former senior president of research and development, were removed from the company’s operations in May and are no longer AveXis employees, according to a company statement.

Brian Kaspar, through his attorney, has denied the allegations.

Lennon doesn’t believe the Zolgensma probe will prompt regulators or potential research partners to spend more time reviewing AveXis’ drug candidates due to Novartis’ pre-existing reputation.

“There’s a tremendous number of interactions that already occur with health authorities, not just by AveXis, but by our parent Novartis, and we can really rely on the extent of that relationship,” he said.