Dutch firms to join Cambridge biotech cluster

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(Boston Globe, The (KRT) Via Thomson Dialog NewsEdge) Sep. 22--A joint biotechnology research venture by two Dutch companies is further underscoring the appeal of the Boston life-science cluster to out-of-state firms, and creating an even tighter real estate market in Cambridge's Kendall Square.



The companies, Crucell N.V. and Royal DSM N.V., decided to lease buildings at 1 Hampshire St. after considering locations in Maryland and the Research Triangle Park in North Carolina, according to Dr. Marco Cacciuttolo, chief executive of the joint venture.

"Cambridge is the real gravitational center of biotechnology," said Cacciuttolo. "It's really the premier location in the world to engage in these research activities."

The facility will employ about 50 people when fully staffed, he said.

In recent years, companies including Schering-Plough Corp., Akzo Nobel N.V., Novartis Pharma, and Merck & Co. Inc. have set up substantial research operations in Boston or Cambridge. They seek access to top biopharmaceutical talent; cutting-edge research from Harvard University, the Massachusetts Institute of Technology, and other schools; and the intangible advantage that comes from being surrounded by other life-science businesses.

The action isn't just limited to the Boston-Cambridge area. In June, drug giant Bristol-Myers Squibb Co. said it would build a $660 million manufacturing plant on part of the site of the former Fort Devens in central Massachusetts.

The Crucell-Royal DSM venture is called PER.C6 Development Center LLC, after a specific line of human cells that the companies are developing.

Many biotechnology companies manufacture treatments by modifying the genetic instructions in animal cells so they produce a specific protein with therapeutic properties. Often, those therapeutics are grown in cells derived from hamster ovaries.

But scientists have found that using proteins made from animal cells can cause dangerous side effects. They have attempted to make the therapeutics more "human," with fewer characteristics of the host cell.

PER.C6 has developed a line of cells it believes will eliminate problems associated with proteins made from animal cells and plans to license the line to biotech companies.

"We want to license the cell line to everybody," said Cacciuttolo.

The venture is equally funded by the two partners. Crucell makes vaccines for two types of hepatitis, influenza, and the diseases that plague travelers, including typhoid. DSM is a sprawling enterprise that manufactures food and pharmaceutical ingredients, and chemicals for a wide variety of applications. It has 22,000 employees and annual sales of about $10 billion. Its biologics division provides manufacturing services to biotech companies.

The new venture will occupy most of the remaining space in a complex of new and existing buildings owned by Draper Laboratory. Last year Schlumberger Technology Corp. leased 190,000 square feet in the complex.

PER.C6 R&D Center is believed to be paying annual rent between $55 and $60 per square foot, and will also contribute to utility costs, real estate taxes, and building operating expenses, according to real estate brokers familiar with East Cambridge. It will receive an allowance of more than $100 per square foot from Draper to convert the bare space into laboratories and offices.

"The biotech cluster is a powerful draw," said Ryan Weber, a life-science specialist with NAI Hunneman Commercial , a real estate firm that represented PER.C6. "This group felt they needed to be in Kendall Square."

Just two years ago, there was a 26.2 percent vacancy rate in Cambridge laboratory and research-and-development space, according to Mark J. Winters, executive director of Cushman & Wakefield of Massachusetts Inc., a real estate firm that represented Draper Laboratory. In the second quarter of this year, the vacancy rate dropped to 11.5 percent. Excluding space available through subleasing, the rate was even lower, 5.5 percent.

"The lab market has shifted from a tenant to a landlord market in a very short period of time," said Winters.

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