Council gives $1 million to bio-tech firm

A German biomedical firm has agreed to relocate its corporate headquarters to San Antonio, create 300 “high-paying” jobs and make a $15 million capital investment here in exchange for a $1 million economic-development grant approved Thursday by the City Council

Cytocentrics Inc., founded in Rostock, Germany, in 2001, also will partner with local agencies to help advance medical research and bolster the area’s biomedical workforce.

Rene Dominguez, director of the city’s Economic Development Department, told the council the company will step up job creation over the first five years and will receive the grant from the city as it hits job-making benchmarks over that time.

Dr. James Garvin, the company’s CEO, told a news conference the vast majority of the 300 jobs will be laboratory technician positions.

“Almost all of those will be white-lab-coat kind of jobs,” Garvin said, projecting those positions will pay annual salaries of around $65,000 to $70,000.

Cytocentrics has set up temporary office space in the Stone Oak area at 18618 Tuscany Stone. But the company still is negotiating where its long-term project site in San Antonio will be, Garvin said. The long-term site will house both the corporate headquarters and manufacturing facility.

Councilman Joe Krier thanked Garvin for locating the company headquarters, at least temporarily, in District 9, and noted the CEO would be his constituent.

“I’m also grateful that you’ve bought a home in District 9,” Krier said. “When you get ready to complain about a pothole, just call me directly.”

The councilman also extolled the virtues of the deal itself.

“This is as good as it gets,” he said.

Cytocentrics has agreed, under the terms of the grant, to partner with the Center for Innovative Drug Discovery — a collaboration between the University of Texas Health Science Center and the University of Texas at San Antonio.

The partnership, according to Dominguez and Garvin, will lead to enhanced research capabilities. The firm also will partner with the Alamo Colleges to “develop a specialized workforce program to train lab technicians and research assistants to help create a pipeline of future biomedical workforce,” city documents say.

The partnership, Dominguez said, could significantly affect drug discovery research and enhance San Antonio’s standing as a national leader in the biotech industry.

The council approved the measure 9-0. Councilmen Cris Medina and Ron Nirenberg were absent.

Nirenberg, who’s in Utah representing San Antonio at A National League of Cities conference, registered his support for the grant.

The agreement calls for Cytocentrics to create the 300 jobs in the city by the end of 2019.

Those jobs will be created in phases — 30 by the end of next year, 45 more by the end of 2017 and 75 more by the end of 2018. The final 150 jobs must be created by the end of 2019, the agreement shows.

The contract also calls for the company to remain in San Antonio for a minimum of eight years and to begin manufacturing activities here by the end of 2017.

Garvin could not project the company’s local manufacturing volume, but noted Cytocentrics’ technology is the only one already fully compliant with an expected U.S. Food and Drug Administration initiative aimed at preventing fatal cardiac arrhythmias caused by medication. That could boost the company’s production, he said.

“If that initiative gets passed, it will mean a sudden spurt for us in terms of volume and how much work is in front of us,” Garvin said.

The company’s technology greatly accelerates the screenings of potential new compounds for drug development, said Dr. William Henrich, UTHSC president.

“It’s my belief that this new technology will open up new inroads into research,” Henrich said, noting it will speed up the process of testing new drugs for cancer, heart disease and pain management.

The company’s patch clamp instrument, known as CytoPatch 2, can capture multiple human cells simultaneously, keep them alive and allow scientists to evaluate how ion channels leading to the human heart are affected by a particular compound. “By understanding that, you can make a better drug, you can change a drug that would be dangerous, you can create all kinds of interesting pharmacological things that benefit all of us,” Garvin said.

Cytocentrics will provide two CytoPatch 2 instruments that will be housed at the health science center. They will be available to other institutions through the Center for Innovative Drug Discovery.

Garvin predicted 10 more of those instruments will be housed at the Cytocentrics’ San Antonio headquarters over the next two years. “There could be more. … The more there are, the more jobs are created,” he said.

Ann Stevens, president of BioMedSA, which works to attract biomedical and life science companies to San Antonio, said the deal sealed Thursday is the largest in the biotech sector since medical device company Medtronic Inc. was granted economic development incentives in 2009 to create nearly 1,400 jobs in San Antonio.

While Medtronic fell short of its five-year hiring target, it created more than 1,100 jobs here during that time span.

“There hasn’t been that many of this magnitude,” Stevens said of the Cytocentrics deal.

Dominguez agreed it’s significant.

“What we’re trying to do is … create San Antonio as a city that has deep knowledge, supply chains, workforce - all of the things that are necessary for these industries to grow,” he said.