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United Therapeutics buys RTP buildings from GlaxoSmithKline


PRESS RELEASE by Triangle Business Journal

– United Therapeutics, already in the midst of tripling its work force here, is stockpiling research buildings and 140 acres of prime Research Triangle Park acreage bought from neighboring drug company GlaxoSmithKline.

Saved, renovated and put to new use will be RTP’s iconic Elion-Hitchings Building on Cornwallis Road that was originally the home to Burroughs Wellcome before that drug firm was bought by GSK. The building was vacated last year.

Otherwise, Andrew Fisher, United Therapeutics’ executive vice president and chief strategy officer, says executives have not yet put all the pieces together on how the rest of the property will fit into the company’s growth strategy. “We don’t have a specific, final plan, yet,” says Fisher.

The properties abut a 55-acre site where United Therapeutics opened a 200,000-square-foot research and manufacturing facility in 2009 and where an expansion is near completion.

The Silver Spring, Md.-based biotechnology company paid GSK $17.5 million for the land and buildings encompassing more than 700,000 square feet of office and laboratory research space in a transaction that closed in mid-June, according to Durham County deed records. The records show the combined tax value for the properties to be nearly $50 million.

Despite the gap between sale price and valuation, Fisher fended off the word “opportunistic” in describing the purchases. Local sources say United Therapeutics was an obvious target for marketers after GSK consolidated its operations onto its Moore Drive campus in 2011 and put its buildings at 3030 E. Cornwallis Road and 52 Maughn Drive up for sale.

UT’s sterling financials

GSK still has available for sale 107 acres in RTP where four buildings have been demolished at 3029 E. Cornwallis Road, as well as the Crown North and Crown South office buildings on Swabia Court that have a combined 200,000 square feet of space.

Raleigh real estate brokers David Finger of Cassidy Turley and Jim Allaire, formerly of Cassidy Turley, represented GSK in the sale. Allaire referred questions about the deal to GSK. GlaxoSmithKline spokesman Kevin Colgan said, “We’re pleased that we completed it.”

GSK has its U.S. headquarters in Research Triangle Park and employs about 4,500 people in the Triangle region. United Therapeutics has become a darling of the pharmaceutical/biotechnology sector among investors and analysts. Largely on the back of its best-selling hypertension drug Remodulin, the company nearly doubled revenue from $385.9 million in 2009 to $743.2 million in 2011. Net income rose from $19.5 million to $217.9 million during those years, respectively.

As of its last annual financial filing, Dec. 30, 2011, the company was carrying relatively light debt of $212.6 million, against total assets of $1.5 billion – $403.5 million of that in cash and short-term investments.

UT, in fact, is funding the GSK property acquisition and the expansion of its existing operations in RTP entirely by cash generated from operations.

The company soon will complete construction of the $76 million, 180,000-square-foot RTP campus expansion that is being built in anticipation of U.S. Food & Drug Administration approval of a new pulmonary hypertension drug treatment called oral treprostinil. United Therapeutics plans to manufacture, package and label the drug at its RTP campus. It also manufactures and distributes Remodulin in RTP.

United Therapeutics employs more than 100 people in RTP, and it anticipates growing to more than 350 employees here once the manufacturing process is ramped up. Fisher wouldn’t comment on anticipated growth beyond that.

The company had 11 job openings listed for its RTP campus as of June 27, including a new position for a corporate site real estate manager.

$1 billion on horizon

Companywide, United Therapeutics employs about 500 people.

In an April conference call with analysts, United Therapeutics Chairman and CEO Martine Rothblatt reiterated the company’s guidance that it was on track to achieve $875 million in revenue in 2012.

She also stated that the company’s pipeline of new products has “clear potential” to take it to more than $1 billion in sales by 2013. “(A)nd in fact it’s got definite leg and head space in the market to go beyond that,” she said.

The deal with Glaxo brings United Therapeutics back full circle to its roots. The company was founded as LRX Pharmaceuticals in RTP by two former Burroughs Wellcome researchers, James Crow and Shelmer Blackburn.


Amanda Jones Hoyle
Staff Writer- Triangle Business Journal