Nearly two years after state and local officials announced a $650 million commercial-scale biomanufacturing plant was coming to Manhattan, the project has yet to see even a shovel move dirt at the northeast corner of Highway 24 and Excel Road.
Scorpius Biomanufacturing, a subsidiary of Nighthawk Biosciences, announced the project in April 2022 at the Manhattan Conference Center, in front of a delegation of state, local and federal officials as one of the state’s largest ever economic development projects. At the time of its announcement, the San Antonio, Texas-based company noted it would bring 500 jobs to the facility within seven years, with an average wage of $75,000.
Manhattan Area Chamber of Commerce President and CEO Jason Smith says he understands some are skeptical about the project coming to fruition. He says the project has been impacted by changing capital markets.
“It’s a lot more difficult to get money to do these kind of projects. The interest rate has gone from 3 to 7 percent. So if you think about a $600 million project and you add 4 percent, from 3 to 4, so you add 4 percent, you’re talking an additional $30 to $40 million a year that you hadn’t budgeted for,” he said.
The company has a binding agreement with the State of Kansas with certain benchmarks on the horizon. It has no binding agreement with the City of Manhattan.
“I know for a fact that they are working incredibly hard to meet those benchmarks. The timeline on that is relatively soon and so I think we’ll know something for certain relatively quickly. I’m going to be cautiously optimistic on that,” Smith said.
Nighthawk announced in a Dec. 12 news release that it will pivot to focus solely on being a contract development and manufacturing organization (CDMO), specializing in large-molecule biomanufacturing and development. The changeover follows “the divestiture of certain non-core assets, as well as the separating out of its Elusys subsidiary,” which the newly named entity will retain.
“That industry is obviously in a bit of a phase. I don’t want to say turmoil, but just some ups and downs that Scorpius is working their way through. We’re going to keep working on it. That’s what we do,” Smith said.
The moves by Nighthawk are expected to eliminate $40 million of contractual obligations as well as over $13 million in annual operating expenses, according to the company’s lead director John Prendergast.
“Moreover, NightHawk will receive an upfront cash payment, as well as a $2.25 million convertible loan and at least $5 million in royalties on future Elusys gross payment receipts for approximately 7.5 years. he said.
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