Title
Consider a resolution authorizing the Mayor to execute a Chapter 380 agreement with Austin Pharma/Insys Therapeutics, Inc.
Body
Austin Pharma was purchased by Insys Therapeutics in 2009. Austin Pharma was designed to manufacture the Active Pharmaceutical Ingredient, Dronabinol, USP for Insys Therapeutics' finished drug product. The Austin Pharma facility and process is an FDA and DEA licensed facility which is routinely audited by both federal entities. Austin Pharma/Insys received FDA approval for the drug product in August 2011. Commercial manufacturing has continued throughout 2012 and 2013. Based on current market share of the existing drug and new formulations currently being reviewed by FDA, manufacturing will need to increase and expand into a new facility. There is no room for expansion in Austin Pharma's current location. In the new facility the current manufacturing process will be expanded. Additionally new processes are being scheduled for the expansion which will include finished drug product manufacturing.
Deal Points for this incentive agreement are:
City:
1. Property tax abatement of 100% year one, 75% year 2, 50% years 3-5
2. Cash grant of $150,000 to be paid upon verification of at least $10.5 million in capital investment
3. Job creation grant not to exceed $50,000 over a 5 year period. $20,000 year one and $10,000 in years 2-4 based on meeting job creation benchmark
Insys:
1. Retain 11 jobs and create a minimum of 30 jobs in excess of $50,000/annually average salary, plus benefits, within four years of relocating to the City of Round Rock.
2. Invest a minimum of $10,500,000 in real and personal property and maintain a taxable value of $7,300,000.
Recommended Action
Staff recommends approval.