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The founders of a pharmaceutical company that’s been based in Greenwood for 16 years plan to relinquish ownership in order to save the business from collapse.
A group of private investors who have bankrolled other pharmaceutical companies has reached a tentative agreement to buy all the stock in Elona Biotechnologies, a firm that’s developed generic versions of insulin and other protein-based drugs it hopes to sell worldwide, said attorney Sam Hodson, who’s been representing the city in the negotiations.
The deal is tentative and won’t be finalized for at least a week, Hodson said. The new owners don’t think Elona could realistically manufacture its generic insulin in a 50,000-square-foot facility the company built with property tax dollars, so the city won’t get the 70 jobs that Elona originally promised.
Elona will keep 11 jobs in Greenwood, mostly management and research and development, Hodson said. The company will have to pay Greenwood back an additional $2 million because it can no longer the promised jobs, he said.
Investors have agreed to repay Greenwood the added $2 million with a lump sum payment that’s due in five years, as part of a new agreement that includes more time to start repaying the debt, Hodson said.
Greenwood also will get added security on $8.4 million in incentives, or additional drug parents and any future parents that Elona gets, Hodson said.
The city will give Elona and its new owners an additional year, or until 2015, to start paying back the incentives, so it has more time to get U.S. Food and Drug Administration approval to sell a generic insulin in the United States.
“The deal greatly enhances our security interests,” he said.
See Thursday's Daily Journal for more information.