Bioniche



May 13, 2013 Bioniche Engages Evercore Partners to Assist in the Divestment of its Animal Health Business May 8, 2013 Bioniche Life Sciences Inc. Reports Q3, Fiscal 2013 Results
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Animal Health and Food Safety Vaccine Manufacturing Centre (VMC)

VMC Construction

The engineering firm, Laporte Consultants of Montreal completed the design work for the VMC in October, 2009, with plans handed over to the general contractor, Belleville-based Cornerstone Builders. During November and December, 2009, the structural steel was installed and the new, third-level penthouse was enclosed.

Inside the penthouse (third level), once the floors, walls and ceiling were installed, a large heating, ventilation and air conditioning system was brought in consisting of four large units. These units contain fans and filters and are designed to ensure frequent air changes to maintain sterility in the production rooms below.

Substantial work was required on the first level to create an equipment room for a steam generator, boilers, chillers and water purification equipment, with connections to the production level above. The early work on the first level involved removing old concrete and laying new concrete, removing and replacing drains, installing electrical conduits, and cleaning/painting the ceiling.

On the second level – the main production area - electrical conduits and piping were installed initially so that connections were in place for all support systems. Walls were installed, drywalled and painted, and epoxy flooring was installed. The space is divided into a number of production rooms, including media preparation, fermentation and processing, buffer preparation, formulation and filling areas. Numerous pieces of production equipment installed in this area, including:

filling and labelling system
2 fermenters (100L and 5,000L)
clean-in-place equipment
downstream processing unit
Water for Injection Still
mixing vessels
autoclaves
Pure steam generator

Up to 40 trades people worked on the site at any given time, with participation of many different trades, including welders, carpenters, drywall installers, piping inspectors, electricians, plumbers, painters, and general labourers. 17,000 square feet of utility space were built to support 12,000 square feet of production. Construction was completed in late March, 2011.

Facility Capabilities

The Company’s goal is to build from its base business in immune stimulation and animal reproduction by launching a series of such highly beneficial and successful prophylactic animal health and food safety vaccines.

The first such vaccine is a cattle vaccine against E. coli O157, the first such vaccine to be fully registered globally.

Bioniche has developed substantial trade secret expertise on inducing bacteria to produce commercial quantities of vaccination proteins during fermentation. These technologies may also be applicable to the development of additional animal health and food safety vaccines, including for Salmonella and R. equi, for which Bioniche is already supporting research and development work. Pending completion of the Vaccine Manufacturing Centre, the Company was using a small product development laboratory for production. The new Centre will substantially increase production capacity.

Facility Financing

This expansion was made possible through financial support from a number of government agencies:

Ontario Ministry of Economic Development & Trade (Advanced Manufacturing Investment Strategy Program) - $10 million repayable contribution
Agriculture & Agri-Food Canada (Agri-Opportunities Program) - $5 million repayable contribution
Business Development Bank of Canada - $5 million repayable contribution
Industry Canada (Industrial Technologies Office) - $5 million repayable contribution

$14 million of the total cost can be attributed to construction, while $7 million was invested in equipment and a final $4 million on engineering design.

Further financial support was provided by the Rural Economic Development (RED) Program of the Ontario Ministry of Agriculture, Food and Rural Affairs, which provided a $2 million grant in 2007 to the Company in support of market development related to the Company’s E. coli O157 cattle vaccine.

More recently (April, 2010), the Company received an investment of $750,000 (repayable loan) from the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) for the development of a pilot-scale fermentation facility adjacent to the new Vaccine Manufacturing Centre. This facility houses pilot-scale fermentation equipment and downstream processing to allow small-scale, bench-top processes to be scaled up and readied for commercial-scale production in the Vaccine Manufacturing Centre.

VMC Employees

19 employees have been hired for the Vaccine Manufacturing Centre to date, with a further seven employees recently hired in other areas of the facility in indirect support positions. An additional 15 to 20 employees are expected to be hired over the next 18 months.

The jobs include Production Supervisor, Production Specialists and Technologists, Validation Engineer, Quality Control, Maintenance Technicians and Utilities Operators.