Covance facility opens in Chandler as anchor for bioscience sector

April 17, 2009

By hammersmith

For more than three and a half years, state leaders in research, industry, and economic development looked toward the opening of Covance Inc.’s new drug-development laboratory in Chandler as an inflection point in Arizona’s efforts to develop its bioscience enterprise.

The arrival of Covance, one of the largest providers of drug-development services in the world, was viewed as a critical step in linking Arizona to the global pharmaceutical industry. The $175 million facility that was unveiled March 26 is bringing with it an immediate 400 high-wage jobs, a number that may well grow to 2,000. It will generate $1.2 million in property taxes annually and should serve as an anchor to draw other bioscience companies to Arizona and the southeast Valley.

At the ribbon-cutting and official opening of the facility, Covance Chairman and CEO Joseph Herring described the new facility as the largest individual capital investment the company has ever made.

“We are betting the company on the success of this facility,” Herring said in the East Valley Tribune.

Covance, based in Princeton, N.J., occupies a critical but easily overlooked niche in the biosciences: outsourced drug-development services. Spun off from global manufacturing conglomerate Corning Inc. in 1997, Covance has steadily built market share among contract-research organizations. Its core business strategy is conducting early- and late-stage studies for pharmaceutical and biotechnology companies with greater cost-efficiency than those firms could achieve in-house.

Wendel Barr, Covance’s chief operating officer, who graduated from Phoenix’s Maryvale High School and DeVry Institute of Technology, touted the role that Covance has played in bringing many well-known treatments to the marketplace—in all, as many as one-third of all drugs on the market today.

“We may not have discovered the drugs, we may not have even made the drugs, but we’re a world-class research facility that made those drugs a reality,” he said in the Arizona Republic.

To meet the needs of its steadily growing client base–and to establish its first facility in the western U.S.–Covance spent $8 million in 2005 for a slice of property along Chandler’s Price Road Corridor, which the city has targeted especially for high-technology companies. Ultimately, when problems emerged related to rezoning the land, largely due to protests from animal-testing opponents, the firm sold that site and purchased an alternative parcel at the nearby Chandler Airpark.

At the time of the initial land purchase, Barr said in the Phoenix Business Journal that the firm picked Arizona over California, Nevada, and Washington because of the state’s commitment to developing its bioscience sector. He explained that officials from the Greater Phoenix Economic Council and the Translational Genomics Research Institute presented compelling arguments for bringing the laboratory to Arizona.

Landing Covance is consistent with Chandler’s focused effort to attract bioscience and high-tech jobs, said Christine Mackay, Chandler’s economic-development director. In addition to Covance’s arrival, she cited a more-recent initiative to redevelop a Motorola Inc. factory as a science-and-technology park.

“What we’ve worked on is to not only bring (firms) into Chandler, but to bring the scientists here,” she said in the Republic in January. “We’ve always tried to keep Chandler focused on technology.”

Chandler Mayor Boyd Dunn said in the Tribune that the opening of the facility was “an important moment for Chandler. The life sciences industry is critical to Chandler’s future,” he added, suggesting that other companies would follow Covance, helping to establish a bioscience hub in the East Valley and strengthen the statewide sector.

For more information:

Arizona Republic, 03/27/2009

Covance officially opens Chandler lab,” East Valley Tribune, 03/26/2009

Chandler enters new areas of tech innovation,” Arizona Republic, 01/10/2009

Covance Laboratories buys land, plans $100 million Chandler facility,” Phoenix Business Journal, 10/19/2005