Northwest Iowa biotech site plans shift as local owner takes over

Nov. 28, 2018

This paid piece is sponsored by South Dakota Biotech.

When his employer announced it was moving operations out of northwest Iowa, Eric Schuler considered his options.

But rather than move with Elanco, where he’d worked since 2011 when it was owned by Novartis or look for another job, he made an offer.

“It just came to me: Why would I pursue something else? Why not pursue this purchase of the site and keep the people doing what they’ve been doing the last 30-plus years?” he said. “If another company didn’t buy the site and bring in a new business, it would essentially shut down, and the employees would be terminated.”

Schuler, the engineering manager for the Larchwood, Iowa site, has a background in construction engineering and management. He previously worked for Henry Carlson Construction Co. in Sioux Falls.

The northwest Iowa location has a nearly 40-year history in large-animal vaccine research, development and manufacturing, going back to 1979 when it was Grand Labs. It was acquired by Novartis in 2003 and Elanco in 2015.

Elanco announced in 2017 it would move the Larchwood research and development segment of the business and then the product manufacturing to Fort Dodge, Iowa.

Schuler put together a team of consultants to develop a plan, formed Vos BioTech this year and successfully acquired five R&D and manufacturing sites from Elanco in August, including equipment and furnishings.

There are about 130 employees and contracted workers remaining at the site.

While Elanco is maintaining operations in Larchwood through 2019, Vos BioTech is working on transitioning it after that to a world-class Custom Research Organization, or CRO, and Contract Manufacturing Organization, or CMO.

“I’ve had a lot of interest,” he said. “There’s a lot of opportunities in the animal health realm. Our focus is on vaccine manufacturing, as that’s what the site is set up for and what takes advantage of the employees’ expertise. I’ve been in contact with multiple national and international companies interested in doing business, and we’ve had multiple visits to the site. So the horizon looks good now.”

The key is determining the right fit or multiple arrangements given the layout of the site, he said. It’s flexible enough that biotech customers in ag, fuel and nutrition also could be served.

“It’s just making sure we put the right arrangement in place for long-term success of the site,” Schuler said. “There’s no guarantee what deal may be landed or how many jobs we can create or maintain, but everything looks good now.”

Vos will have the second-largest biomanufacturing capability in the region, and there is significant demand for it globally, said Christoph Bausch, chief scientific officer for SAB Biotherapeutics, who has extensively researched the area bioscience economy.

“Vos services can be leveraged not only for producing animal biologics but other bioactive products like enzymes and bacteria used as biofertilizers, materials for producing biofuels and bio-based chemicals, and biologics for human health and nutrition,” Bausch said.

“Additionally, Vos BioTech has R&D capabilities, and these go hand-in-hand with innovating new bioproducts that may transition into new biomanufacturing opportunities.”

The name “Vos” draws on his philosophy for the business, Schuler said. It’s Latin for “you.”

“The focus is on taking care of you, the employees, and once we take care of the employees, we can start taking care of the patients, clients, end customers and community.”

The company is a welcome addition to the regional biotech community, said Joni Johnson, executive director of South Dakota Biotech.

“The Sioux Falls area is really becoming known for its work in animal health, and Vos BioTech offers exactly the sort of services that are needed to continue that momentum,” she said. “We’re pleased the talent will remain in our area and look forward to seeing the business grow.”

Leveraging a regional strength such as biomanufacturing is essential to growing the bioeconomy, Bausch added.

“We are also very fortunate to have entrepreneurs like Eric Schuler, who is truly dedicated to the success of Vos BioTech and focused on keeping a valued and talented biotech workforce in this area and attracting new biotech opportunities and creating new jobs,” he said. “Simply put, this is absolutely fantastic for our biotech future!”

Northwest Iowa biotech site plans shift as local owner takes over

“Simply put, this is absolutely fantastic for our biotech future.” The potential for growing bioscience work in the Sioux Falls region is stronger thanks to one new industry entrepreneur.

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