News From Terre Haute, Indiana

Mark Bennett B-Sides

January 15, 2012

MARK BENNETT: Keys to the future

Hope was not a casualty when Pfizer left town

TERRE HAUTE — Steve Witt fielded a jarring phone call in October 2007.

Last week, his office telephone lit up with calls from well-wishers.

The four years in between those moments felt pretty bleak, at times, for Witt, the president of the Terre Haute Economic Development Corp.

“It’s been a very interesting process, and educational,” Witt said Wednesday. “It’s been extremely difficult.”

The closing of the Pfizer plant in southern Vigo County left a deep wound in the local economy. On Oct. 18, 2007, the company shut down production of Exubera, an inhaled insulin drug that failed to appeal to diabetes patients. Pfizer had invested $300 million into its Exubera operation at the plant, which opened after World War II. Eventually, the firm closed the entire facility. As a result, 750 high-paying jobs were lost. The county lost hefty tax revenue, too; Pfizer paid $334,007 in Vigo taxes in 2007. The United Way of the Wabash Valley lost a massive contributor; Pfizer donated $440,000 in 2006, accounting for 21 percent of the organization’s fundraising efforts.

“I’ll probably never forget the morning I got the call from a Pfizer representative, saying they were going to announce they were ready to pull the plug on the Exubera project,” Witt said.

“Losing Pfizer,” he added, “was a tremendous blow in so many ways.”

Much was lost. Fortunately, hope was not a casualty, too. The significant void left by Pfizer could begin to refill.

The California-based company NantWorks announced last week that it will locate a new pharmaceutical manufacturing plant in the former Pfizer facility, creating 234 new jobs with an average annual salary of $51,000. It is expected to be operational by 2016. The plant must be retooled for production of NantWorks’ critical-care injectable and cancer drugs, among others, and that takes time. Approvals by the federal Food and Drug Administration of the products and manufacturing process don’t happen overnight either.

Four years seems like forever in a town hungry for jobs. Yet, “it is really lightning speed for the pharmaceuticals industry,” Witt said.

Vigo Countians are indeed anxious. A few called the Tribune-Star the morning the announcement hit the newspaper, asking about NantWorks job applications. It’s still early for that, though work to earn FDA validation will initially involve about 30 people, mostly engineers.

Some “ifs” remain. “There’s no guarantee the [FDA] approvals will come,” Witt said. “That’s why the pharmaceutical industry is such a risky business.” The deal involves state tax and training incentives for NantWorks, which bought the site appraised at $6.5 million from the Vigo County Redevelopment Commission for the token price of $1, as well as compensation to the county if the project doesn’t unfold as planned.

Still, NantWorks’ intentions brighten the economic skies over Terre Haute. The announcement comes at a time when the economy is “slowly improving,” Witt said. The recovery from the Great Recession, which hit in December 2007, has been too slow for most people, and that comeback remains somewhat fragile. “But within the last year, we’ve seen a major uptick in inquiries” by companies interested in Vigo County, Witt added.

The diversity of local employers helped Terre Haute weather the recession better than other communities relying on one mega-industry, he said. That mix of companies and the workforce serving them, along with the presence of five colleges, enhance the city’s appeal.

There have been rough times, though. Inquiries by site-shopping companies slowed to a trickle in the depths of the recession. Pfizer had its 845-acre campus on the market for nearly a year, before the county acquired the property in September 2009. That “put us in the property management business,” Witt said, which led to his own crash courses in building maintenance. The day Pfizer officials physically turned over the keys was an eye-opener, too.

“I’ve never seen so many keys and key cores in all my life,” Witt said. “We’re talking hundreds.”

The possibility of handing those same keys to another pharmaceutical firm someday seemed like a longshot. The building has been vacant for almost two years. Time can take a toll, and was running out. “I personally thought the chances of obtaining another pharmaceutical company for the facility was probably pretty slim,” Witt said.

A different drug-producing company toured the site last spring. “We thought it was a very positive visit, and they left, and we never heard from them again,” Witt recalled.

The Pfizer site drew NantWorks’ attention in September, and the California business created by biotech billionaire Dr. Patrick Soon-Shiong quickly arranged a tour, and then continued working toward last week’s announcement.

“A lot of good fortune and stars aligning,” Witt said, describing NantWorks’ decision to invest $120 million over five years in redeveloping the plant.

Filling the shoes of Pfizer — a global corporate giant — remains a tall order for the community. Is it realistic to expect a newcomer company to become a Pfizer-like bedrock of local employment for the next 60 years? “Perhaps not,” Aparna Krishnan, a senior analyst for health care and pharma issues at IHS Global Insight at London, told the Tribune-Star last week by email.

The void left by Pfizer must be kept in perspective. Pfizer employed 300-plus people before ramping up its workforce for the Exubera in the past decade, Witt pointed out. The future can’t be predicted, he emphasized, but “this [NantWorks] project and opportunity compares very well with what Pfizer had at the site before [Exubera].”

The presence of a world-class company such as NantWorks also increases the potential for more to consider the county, Witt said. It gives the community credibility in the intense competition for prospective industries.

“I think we have a lot to be thankful for,” Witt said.

Folks who clung to that belief back in October 2007 helped keep Terre Haute progressing toward the possibility for better days.

Mark Bennett can be reached at (812) 231-4377 or mark.bennett@tribstar.com.

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