HARTFORD, Conn. (AP) — Alexion Pharmaceuticals Inc. is expected to create up to 300 new jobs after moving its headquarters to New Haven with as much as $51 million in state aid, Gov. Dannel P. Malloy announced Tuesday.
Malloy announced the economic development move as part of his "First Five" initiative intended to spur large-scale business development.
Alexion, which posted profit of $175.3 million on sales of $783.4 million in 2011, was founded in 1992 in New Haven's Science Park. It moved in 2000 to Cheshire, where it employs more than 350 workers.
State aid includes a 10-year loan of $20 million at a 1 percent interest rate with principal and interest deferred for five years, loan forgiveness of $16 million to $20 million based on the creation of 200 to 300 full-time jobs, and a $6 million grant to build laboratories and equipment.
Alexion says it will establish its global headquarters at a new site to be built in New Haven by 2015. The drug developer's only approved product, the rare blood disorder treatment Soliris, treats paroxysmal nocturnal hemoglobinuria, or PNH, which causes a breakdown of red blood cells and leads to anemia.
The drug was approved in late 2011 also as a treatment for a second condition, atypical hemolytic uremic syndrome, which often leads to kidney failure and death.
Spokesman Irving Adler said Alexion anticipates growth with new uses for Soliris and research and development into more pharmaceutical compounds.
The company had other options for locating its new headquarters, he said, mentioning a site where it operates in Smithfield, R.I., and a research and development office in Cambridge, Mass. Connecticut's state aid was "a factor in our decision, absolutely," Adler said.
The Republican minority in the state legislature on Tuesday demanded a public hearing to review the Alexion deal. Senate Republican Leader John McKinney and his House counterpart, Rep. Lawrence Cafero, said they want to know what kinds of jobs will be created, if the state worked with Alexion and Cheshire officials to keep the company in Cheshire and what, if anything the state is doing to help Cheshire and local taxpayers absorb the cost of the company's loss.
Cafero said it's unclear that $51 million in state incentives is necessary to keep Alexion in Connecticut.
Andrew Doba, a spokesman for Malloy, a Democrat, said the administration has extensive safeguards to protect taxpayers, including requirements for collateral, a 10-year residency requirement, job creation and retention targets and capital investment requirements.
Jerry Sitko, Cheshire's economic development coordinator, said Alexion's move will cost the town $155,000 in personal property taxes assessed on machines, vehicles and the like, and an even higher amount in real estate taxes.
Alexion informed Cheshire officials a year ago it was considering a move to New Haven for more space, he said.
"It's disappointing, of course, but it did not come as a surprise," Sitko said.
Chief Executive Leonard Bell said that by combining Alexion's research, operational and administrative functions at one site, efficiency will be maximized while the company remains in Connecticut.
The project includes construction of a $100 million laboratory and office building in which Alexion will be the primary tenant. The 400,000-square foot building will include retail stores.
Alexion is the fourth company to benefit from Malloy's "First Five" initiative, which was established last year to consolidate state tax credits to draw the first five businesses investing $25 million in Connecticut and creating 200 jobs over five years.
ESPN, Cigna and NBC Sports TicketNetwork are the others to have received state aid in exchange for pledges of job creation.