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Wednesday, December 10, 2003 - Page updated at 12:00 AM

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Skeptics relieved as Amgen finishes 'dream campus' Immunex started

Seattle Times business reporter

Helix through the years


1992:


Immunex approaches the Port about buying 29 acres of land at Terminal 88, just north of the grain elevator. Immunex plans to build a headquarters and research-and-development campus.

1993:


After flirting with a move to Bothell or elsewhere, the company announces plans to build in Seattle.

1996:


Neighborhood groups complain about raising the building height limit from 45 feet to 65 feet, saying views will be blocked. They also fear parking and traffic problems.

1998:


Immunex buys the property for $13.5 million and receives a permit from the city. The city, county and Port agree to pay for a West Galer Street bridge over the railroad tracks to provide 24-hour access to the property. Immunex's first hit drug, Enbrel, is approved by the FDA.

2001:


Immunex breaks ground in January, and more than 1,200 people show up at the ceremony. Construction was estimated to cost $750 million and last three years. Demand for Enbrel soars, but Immunex can't produce enough, misses out on $200 million or more in sales, and agrees to be taken over by Amgen in December. Amgen says it is committed to Helix.

2002:


In March, Immunex stops construction on the headquarters building, but work continues on the research buildings.

2003:


Amgen widens its research base in Seattle in May by adding cancer research to inflammation. Enbrel is on pace for up to $1.4 billion in sales for the year.

2004:


Amgen plans to move 750 scientists to the Helix Project, starting the first week of January. The move will take four months. Final cost: $625 million.

Amgen could have cut the heart out of Seattle biotech.

The industry king hurt the region when it took over Immunex, Seattle's brightest biotech star. It stung the regional economy when it cut 500 high-paying jobs last year and shipped 200 others to Southern California. It wounded civic pride when — in its commanding way — it said it didn't need a headquarters like Immunex was building on the Seattle waterfront.

The city and the Port of Seattle, who enticed Immunex to stay in town by offering cheap waterfront land and a free bridge, suddenly appeared to be left holding the bag. The chance to be home to a company with Microsoft-like potential might be lost.

But Amgen kept building. It spent Safeco Field-type money on Immunex's dream research campus, the Helix Project, a name inspired by the structure of DNA. The headquarters piece of the campus was scrapped, but the gleaming 750,000-square-foot research center in the Interbay neighborhood is still massive enough to rival visions for South Lake Union buildings.

After the first of the year, 750 employees will start moving into the $625 million campus, signaling that the company has long-term plans for Seattle.

"Helix is not just Immunex's dream, it's Amgen's dream," said Ed Fritzky, former chief executive of Immunex and now a member of the Amgen board of directors. "The vision for each organization was: 'How do you come up with breakthrough science?' "

When Amgen bought Immunex, it said all the right things, but business leaders were skeptical: Why would a company based in Southern California invest so big in Seattle? Why not take Immunex's billion-dollar arthritis drug, Enbrel, milk it for all it's worth, and ask its top researchers to move to its base in Thousand Oaks, Calif.?

The short answer: It needed a research team to create medical breakthroughs, and Immunex's scientists had created one of the biggest of the past five years — something Amgen couldn't say. With deep Northwest roots, many Immunex employees weren't willing to leave. Amgen has also had trouble recruiting scientists to Southern California.

The bet on Seattle

Roger Perlmutter, Amgen's chief of research and development, explains the decision in the context of a pharmaceutical industry in sorry shape. It is America's most profitable industry, but companies are failing to create more stellar drugs.

Amgen was simply "chugging along," as Perlmutter says, riding two of the most profitable drugs ever, but that couldn't last forever. Wall Street wanted more profit now and more in the future.

"When you look at Amgen, you can see a story of increasing revenue, increasing earnings, patents that don't start expiring until 2013," Perlmutter said. "That's great. But ... what do we put in place now so that in 2013, we don't look like the pharmaceutical industry of today?"

Amgen didn't need persuading to stick with Helix.

Big drug companies want smaller, more efficient research teams around the world who can cozy up with leading academic researchers — rare in Southern California but common at the University of Washington and the Fred Hutchinson Cancer Research Center.

"You want to locate research where the hottest places in the world are for research, and Seattle is one of those places," Fritzky said.

The Helix Project

The campus had been the dream of Immunex since the early 1990s, when the company was grew so fast, it splintered into 11 downtown buildings. Bureaucracy choked off its science mojo, and the company wanted it back. At Helix, the thinking went, scientists would brainstorm more and discover more.

Immunex had designed a complex protein drug, Enbrel, to neutralize excess inflammatory cells. It worked so well that some people who had been bedridden with arthritis could go back to work or even play golf. Thousands of patients were paying $1,000 a month for a drug they'd need the rest of their lives, and the business looked bright. The company wanted to do it again.

Helix was envisioned before Enbrel's success and green-lighted once the money started flowing. It was to be up to 15 buildings with a skyscraper-like 1.3 million square feet on 29 acres along Elliott Bay, with 11 acres set aside for expansion. It eventually would have room for 2,500 employees. The initial price tag was $750 million, more than Safeco Field.

The public paid $19 million to build an overpass to the property, which the city said would be recouped — and then some — through property taxes over the years. Immunex pledged $1 million to build a pedestrian walkway at another spot over the railroad tracks, connecting its employees to the campus and the public to Elliott Bay. Immunex broke ground in January 2001.

Eleven months later, Immunex agreed to be bought by Amgen for stock and cash, a deal ultimately worth $10 billion. Amgen CEO Kevin Sharer publicly said the company was committed to building Helix.

But four months later, Immunex halted construction of the headquarters because Amgen didn't need one. It intended to continue building the "world-class inflammation-research center." Many in Seattle biotech, including some inside Immunex, had doubts.

Construction is now expected to be finished just before New Year's Day. Employees will move in over four months to minimize disruption of experiments.

Amgen raised the stakes in May by adding cancer researchers to the inflammation group. Amgen is building the DNA-themed pedestrian bridge to the waterfront. Once Helix is up and running, Amgen says it may look to expand on the 11 acres it set aside.

The company says it kept most of Immunex's design: Tall windows let in natural light; walls are painted in pastels; landscaping is lush; it has a fitness center, cafeteria, auditorium and plenty of impromptu meeting spots. It will not have wireless Internet connections because of security fears, but it will have numerous outlets for laptops.

It melded art into basic lab functions. Spiral staircases with a rough steel surface are inspired by the chaos of cells when first viewed under a microscope. A smoother steel staircase symbolizes the order scientists can bring to cells with genetic engineering.

The campus will house the tricky but vital process of making biotech drugs. And although Amgen doesn't advertise the fact, it will have a base for animal testing, which is necessary before drugs are tested in people.

To experienced biotechies, it's a sure sign that Amgen has put down roots. "In this business, you don't build a $625 million facility and move out," said Bruce Montgomery, chief executive of a startup, Corus Pharma. "It's indicative of a long-term, big-time commitment."

Regional impact

Ben Wolters, a city economic development official who has worked six years to help shepherd the Helix Project along, said there were fears about campus' fate when Amgen bought Immunex.

The bridge that was supposed to cost $12.5 million ended up costing $19.3 million. Instead of Helix generating $38.9 million in property taxes in two decades, it is expected to bring in $25.9 million, Wolters said.

Neighborhood critics will never forget that Immunex got a sweetheart deal, buying — cheaply — prime waterfront property from the Port and getting taxpayers to pay for a bridge that added to the property value. But the city got its money's worth, Wolters said.

"We have in the ground a state-of-the-art biotech R&D facility in Seattle," Wolters said. "It is going to anchor research in this community for the leading biotech company in the world."

City Councilman Richard McIver said he's relieved.

"We're not so well-schooled in private business," McIver said. "It never occurred to us that Immunex would be bought out."

To Seattle biotech, the Helix campus is a dramatic leap. Before, companies got by with makeshift lab space in old warehouses, a steam plant, used car dealerships, or hospital labs. Now, a new generation of buildings is being built by Paul Allen's Vulcan firm in South Lake Union, and others are on the way. But many say Helix represents the city's first world-class lab space for a for-profit biotech company.

"From what I've seen in the biotech world, Helix is right there at the top," said Guy Ott, vice president of facilities at "The Hutch." "Most companies start in concrete warehouses and try to make a silk purse out of a sow's ear, and this is one of the few places where a large campus has been planned right from the ground up."

The future

Montgomery, the startup chief, said few startups have blossomed lately, but they could gravitate to cheaper lab space that Amgen will be emptying when it moves. It will be the first flood of available lab space in Seattle in years.

Doug Williams, the former chief technology officer at Immunex and now chief scientist at Seattle Genetics, said he can see Amgen scientists learning more about the inner workings of the immune system, creating follow-ups to Enbrel. There won't be many excuses not to, he said, because it will have some of the best people, one of the best facilities, and the industry's deepest pockets pushing them to show results. Helix will grow, and other biotechs will flock to be near it.

"I know that group, and I wouldn't bet against them," Williams said.

Linda Park, a former Immunex researcher, agrees but says she still mourns the loss of the freewheeling, one-for-all, can-do culture of Immunex. But she senses that morale of her former colleagues is improving as the move-in date nears.

Lately, when she drives on Elliott Avenue past Helix, she reminds herself that her life's work wasn't blown up in a corporate merger.

"Helix is a place to do science, and it will be there 50 or 100 years from now whether it's owned by Amgen or anybody else," Park said. "Labs are really expensive to build. They take a long time, and they're very specialized.

"Nobody will ever turn that into offices. It will be a great place to do science. That was always the Immunex dream."

Luke Timmerman: 206-515-5644 or ltimmerman@seattletimes.com

Copyright © 2003 The Seattle Times Company

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