Perry touts sale of state-backed biotech company

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COLLEGE STATION, Texas (AP) — A private startup awarded more than $40 million in taxpayer dollars at Texas A&M University and sold to an international drug manufacturer will expand the state's influence on biotechnology, Gov. Rick Perry said Thursday.

Kalon Biotherapeutics LLC was founded in 2011 by the A&M system and has received money from both the state's $3 billion cancer-fighting agency and a signature Perry fund that gives public dollars to high-risk tech startups.

North Carolina-based Fujifilm Diosynth Biotechnologies announced Thursday the completion of an acquisition that gives the company a 49 percent stake in Kalon for now with plans to acquire the rest of the company later. Terms of the sale were not announced, but the state has held a 20 percent interest in Kalon since 2012 after giving the company $40 million.

"Today's signing represents an important next step and an exciting new chapter for the State of Texas, which is fast becoming a global leader in biotechnology and pharmaceutical manufacturing," Perry said.

Kalon was created to help operate a major federal biodefense laboratory in College Station. The Texas A&M Center for Innovation in Advanced Development and Manufacturing is among three national biodefense centers established with the goal of helping the country quickly develop vaccines and strategies for responding to bioterrorism.

Fujifilm said the acquisition allows the company to expand into vaccine-based products and services.

It is the kind of sale Perry envisioned when he began the Texas Emerging Technology Fund with the intent of bringing high-paying jobs and innovation to the state. The fund has awarded more than $220 million in taxpayer funds since 2005 and will go down as one of Perry's biggest initiatives when he leaves office next month.

But questionable job-creation claims and companies that went bankrupt have intensified scrutiny on the fund in recent years, and its prospects of survival next year are uncertain.

Kalon also received $8 million from the Cancer Prevention and Research Institute of Texas in 2012. A Nobel laureate who formerly served as the agency's chief scientific officer questioned why Kalon received the money despite its application receiving poor to modest scores from peer reviewers. Kalon executives at the time defended the feedback it received as positive.

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