Bristol-Myers Squibb Co. plans to demolish half of the 118 buildings at its East Syracuse operation in a facelift that reflects the changes that have occurred inside the drug plant.
World War II-era buildings will be replaced by landscaping and fitness trails as Bristol transforms the site into a park-like campus more typical of the kind of biotech research center it has become.
All of the 60 buildings to be demolished are obsolete, with many of them unused since Bristol began phasing out penicillin production at the plant in 2004, the company said. Some of the buildings date back to the 1940s.
Bristol will spend “tens of millions” of dollars over the next two years on the work, said Nancy Rurkowski, general manager and senior director of operations at the plant. She declined to be more specific.
Bristol is evolving from a traditional pharmaceutical operation that mixes chemicals to one focused entirely on medicines derived from cells taken from plants or animals.
At the East Syracuse facility, that has meant a move away from full-scale production. Now, workers make small amounts of drugs for clinical trials and research ways to mass-produce biopharmaceuticals. The actual production is then done at other Bristol facilities or by third parties.
The plant employed more than 2,000 people in the early 1980s at the height of its penicillin production and had 820 employees just three years ago. But employment this year is down to 570, and it will fall to 470 by the end of this year after 100 jobs in the plant’s drug safety and evaluation operations move to Bristol facilities in Indiana and New Jersey.
Many of the remaining jobs at the plant are held by biochemists, molecular biologists, engineers and others in high demand.
“It’s a highly skilled work force, a high-education work force,” said Rurkowski, who held several leadership positions with Bristol, including overseeing operations in the Philippines and Australia, before coming to East Syracuse in 2008.
Biologics — drugs made from plant or animal cells — are a rapidly growing part of the drug industry. They offer several advantages for patients, including having fewer side effects and having a greater potential to cure diseases rather than just treat their symptoms.
They also have a business advantage for Bristol.
One of the major risks for drug makers is that profits from their higher-priced, name-brand medicines drop rapidly once their patents expire and competitors’ low-priced generic versions hit the market.
For example, Bristol's exclusive rights to make the anti-clotting drug Plavix will expire in 2012. That's a chief concern for the company: Plavix is its biggest seller, generating one-third of the company's $18.8 billion in sales in 2009.
U.S. law prohibits sales of generic versions of biologics. That’s likely to change, but biologic manufacturing requires more complex and costly processes than traditional pharmaceuticals, making it difficult to produce cheap generic versions. That gives Bristol — and its earnings — a measure of protection not available with drugs made from chemicals.
The all-out move to biologics is paying off for Bristol. On June 5, it announced that a biopharm drug, ipilimumab, was shown in a trial to significantly improve the survival of patients with advanced melanoma, the deadliest form of skin cancer. The drug works by helping the immune system fight tumors and is the first to prolong survival for people with melanoma, which is almost always fatal after it spreads to vital organs.
The news about ipilimumab, one of the new drugs that Bristol researchers in East Syracuse and elsewhere have been developing, prompted analysts for Goldman Sachs Group, Citigroup Inc. and Leerink Swann LLC to upgrade their ratings of Bristol’s stock. The stock’s price quickly rose from just under $24 to nearly $27. Analysts said ipilimumab could become a blockbuster for Bristol once it hits the market, possibly by the end of the year.
The East Syracuse facility got its start in 1943 at the height of World War II when Bristol, which had earlier in the year acquired Cheplin Laboratories in Syracuse, erected a building to produce penicillin, the new miracle drug to fight infections. Over the decades, the plant produced up to 70 percent of the penicillin made in the United States.
But competitors began making the antibiotic and profit margins shrank. Bristol gradually phased out its production at the plant — and with it went the unwelcome fermentation odor.
In its place, the East Syracuse plant has become a center for the development of manufacturing processes to make biologics. One other Bristol facility, in Hopewell, N.J., has the ability to do that. But the East Syracuse plant is the only Bristol facility with the manufacturing capacity to produce biologic drugs for clinical trials and the initial commercial launch of the drugs.
Biologics are made by growing cells in highly controlled environments, mixing in just the right amount of oxygen and nutrients, all kept at the right pH and temperature for the right amount of time. The proteins produced by the cells are then harvested, purified and manufactured into medicines to treat diseases such as cancer, rheumatoid arthritis and diabetes.
Local government and business leaders hoped to get Bristol to resume full-scale drug production locally in 2006. The company was looking for a site for a new biopharmaceutical plant that would employ 350 initially. Bristol wound up building the $660 million plant in Devens, Mass., where construction was finished last year.
Bristol says its new look in East Syracuse will help it recruit talent. It also will cut energy costs.
And just as important, doing away with the buildings where penicillin was made will protect the new drugs from contamination by the traces of penicillin, she said.
While penicillin has saved millions of lives with its ability to kill deadly bacterial infections, some people’s immune systems overreact to it, causing rashes and in some cases potentially fatal effects. No one who is allergic to penicillin will be allowed to work on the demolition.
The 60 structures to be demolished contain 600,000 square feet of lab, office and manufacturing space — 48 percent of the total square footage of buildings at the plant.
Among the buildings slated to be demolished is the administration building at the main entrance to the plant from Thompson Road, one of the few buildings that can be seen from the road. The company’s property dips down behind the administration building, making it nearly impossible for the public to see how vast the facility is.
The second phase of the project is still in the planning stages, so it is not a certainty that the administration building will be removed, Rurkowski said. The Hueber-Breuer Construction Co., of Syracuse, will be the lead contractor for the project, she said.
Work started this spring when Bristol demolished a 210-foot smokestack, the tallest structure on the site.
Bristol is the largest industrial property in the village of East Syracuse. This year, it will pay a total of $2.26 million in village, town, county and school property taxes.
Rurkowski said she could not comment on how Bristol’s tax assessment could change.
“We’ve been meeting with the village since last year to give forewarning,” she said.
East Syracuse Mayor Danny Liedka would not discuss the impact on taxes.
--Contact Rick Moriarty at rmoriarty@syracuse.com or 470-3148.