Gilead is set to buy an R&D facility for its CAR-T unit Kite Pharma. Costar reports the big biotech has bid $135 million for a 160,000-square-foot site in Santa Monica, California, formerly occupied by Astellas’ Agensys.
The deal would be the highest price ever paid for a flex R&D site in Los Angeles County, in terms of both absolute value and on a per-square-foot basis, according to commercial real estate information company Costar. In return for the outlay, Kite will gain R&D, GMP and CMC spaces spread across a three-story building located a few minutes drive from its 180,000-square-foot headquarters.
Gilead’s willingness to spend big to buy the capacity—and likely continue to pay out for the leasehold on the building—is indicative of the importance of Kite to its plans. Kite’s approved CAR-T Yescarta is the near-term focus of Gilead’s $11.9 billion takeover. But Gilead has been clear from day one of the deal that it wants to build a major cellular therapies unit, not simply add a CAR-T to its portfolio. The $135 million splurge on the Santa Monica site is evidence of this line of thinking.
The biotech’s largesse has also refocused attention on the long-running question of whether Los Angeles can ever build a biotech hub to rival those in neighboring San Diego and San Francisco.
“There is a lot of excitement about what is the next economic demand driver in Los Angeles, and one answer is science and research and development in biotech. Now that Kite Pharma is growing full speed and buying and expanding in Santa Monica, it could be the next growth driver,” Greg Bisconti, executive director of the life science practice group at Cushman & Wakefield, said.
The property at 1800 Stewart Street came on the market after Astellas decided to wind down work at its Agensys subsidiary. Astellas bought antibody-drug conjugate specialist Agensys for $387 million upfront in 2007. Agensys redeveloped the Stewart Street site four years later to house its growing workforce. But the subsidiary’s upward trajectory halted last year when Astellas decided to close it down, lay off its 220 employees and sell its facility.