GRAND RAPIDS — The $160 million federal contract to produce a COVID-19 vaccine when it’s ready elevates Grand River Aseptic Manufacturing Inc. into what Tom Ross calls the “big leagues.”
The deal with the U.S. Department of Defense and the Department of Health and Human Services (HHS) accelerates growth and can give GRAM greater visibility across the industry, said Ross, president and CEO of the Grand Rapids-based contract developer and manufacturer of sterile injectable drugs.
“It really takes GRAM to the next level,” Ross told MiBiz. “We have consistently grown and become a leading contract development and manufacturing organization.
“Now with the program, with the government support and what we’re doing to support the COVID vaccine, it accelerates our growth and allows us to invest in the future much quicker than we would have anticipated. What that does is enables us to continue to enhance our reputation in the marketplace.”
Through the contract, the federal government essentially reserved the company’s production and distribution capacity for a vaccine that a number of pharmaceutical companies are racing to develop through what’s known as “Operation Warp Speed.” The $10 billion public-private partnership aims to develop and have 300 million safe and effective doses of a COVID-19 vaccine on the market by January 2021.
After completing and opening a $60 million, 60,000-square-foot expansion this summer, GRAM is “incredibly well positioned to support any pandemic effort over the next several years,” Ross said. The new facility on Butterworth Street southwest of downtown tripled the company’s production capacity.
For a potential COVID-19 vaccine, the company would work with a publicly undisclosed “leading pharmaceutical company,” Ross said.
Prepared for expansion
The contract came from the Biomedical Advanced Research and Development Authority (BARDA), which is a part of the HHS Office of the Assistant Secretary for Preparedness and Response, and through the Defense Department’s Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense, and the Army Contracting Command.
Becoming part of Operation Warp Speed potentially opens up new business opportunities for GRAM, Ross said.
“Over the next year, we need to be in a state of readiness to be able to support the government’s effort through BARDA and work with whatever vaccine company wants us to work with them, and that should bode well for the future,” Ross said. “We’re working with some of the largest pharmaceutical companies in the world to accomplish some great things. This gives us the visibility and the opportunity to do substantially more than what we had prior.”
GRAM employs about 210 people at five facilities in Grand Rapids and will need to hire 75 to 100 new employees within the next few months, ranging from entry-level positions to “highly technical” managerial positions, Ross said.
The company also will purchase additional equipment for the new facility, which was built to accommodate further production expansions.
“We can add more clean rooms, more fillers and more equipment and accelerate the process of expansion in that building,” Ross said. “We’re instantly a much bigger company. It’s just an incredible opportunity for us. The ability to work on a life-saving drug like this is something that’s beyond our wildest dreams, to be able to help and contribute in that way.”
BARDA identified GRAM and reached out to the company as a possible participant in Operation Warp Speed that could bring added capacity to the partnership, Ross said. BARDA representatives toured the company’s facilities in Grand Rapids, including the recent expansion that has “the latest technology and the most sophisticated equipment,” and later awarded the contract, he said.
Operation Warp Speed has signed deals with a number of pharmaceutical companies such as Pfizer Inc. and GlaxoSmithKline plc that are in clinical trials with vaccine candidates. The initiative in July signed a $1.95 billion contract with Pfizer for the production and distribution of 100 million vaccine doses in the U.S.
Pfizer, which has said production of a COVID-19 vaccine will include a facility in Kalamazoo, started a Phase 3 clinical trial July 27 on a vaccine candidate.
Originally founded in the mid 2000s as a joint venture between the Van Andel Institute and Grand Valley State University, GRAM got off to a slow start.
Local investors led by Charter Capital Partners in Grand Rapids acquired GRAM’s assets in late 2010 and put $5 million into the company. The investment group — which includes VAI, GVSU, individual members of Grand Rapids-based Grand Angels, and the Municipal Employment Retirement System of Michigan — formed a new corporate entity and recruited a new management team that put the company on the right track with a strong growth trajectory after years of problems.
In 2017, local investors then sold a majority of the company to Arlington Capital Partners, a Chevy Chase, Md.-based private equity firm. Some of the local investors retained minority stakes in GRAM, which has gone on to record strong annual growth rates.
Arlington Capital Partners and local investors provided a “significant amount” of capital to support GRAM’s growth and recent expansion, said John Kerschen, president and managing partner at Charter Capital Partners.
“For those of us that have invested in technology companies, life science companies, small development-stage businesses around West Michigan, this is a poster child for how it’s supposed to work out and how you hope they work out,” said Kerschen, who specifically touts GRAM’s job growth and the new positions created through the Operation Warp Speed contract.
“These are definitely top-shelf kinds of positions for our community,” he said. “If you can draw up an economic development plan for the kind of jobs you want to have in your community, this is it. These are skilled positions, highly compensated, stable jobs and the facility itself is really important. You can’t pick this thing up and move it somewhere else.”
Birgit Klohs, president and CEO of the economic development organization The Right Place Inc., said GRAM is a success story resulting from the spinoff benefits from development of the Medical Mile biomedical research and health care cluster in Grand Rapids over more than two decades.
“To see them succeed in such a way is fabulous,” Klohs said.
‘A great testament’
Operation Warp Speed’s contract with GRAM as well represents “a great testament to their capabilities” and “a testament to the strengths and the capacity that our industry has here in Michigan if you look at them (and) you look at Pfizer,” said Steve Rapundalo, CEO of the life science trade association MichBio in Ann Arbor.
“It’s quite remarkable and it’s very satisfying to know that we have that kind of expertise and technological capabilities that can be leveraged so quickly toward a very acute problem,” said Rapundalo, who calls the GRAM contract “just the latest example” of the capabilities of pharma companies in the state that date back the mid 1860s.
“Our pharma industry’s been around a long, long time,” he said. “So I’d say we know a thing or two about pharma.”