CMC Icos Biologics said Thursday it has had put a major expansion of its Bothell facility on hold in a bid to save cash amid the economic downturn.

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CMC Icos Biologics said Thursday it has put a major expansion of its Bothell facility on hold in a bid to save cash amid the economic downturn.

“With the current challenges of the global economy, we must carefully manage our resources,” President Gustavo Mahler said.

The expansion, announced in September and scheduled for completion in 2010, would have nearly doubled the company’s 141-strong work force and quintupled its capacity to churn out biotechnology compounds on contract. The project was estimated to cost $35 million.

CMC Icos Biologics said it hasn’t set a new completion date yet, and wouldn’t do so in the near term.

CMC Icos Biologics was formed when Danish company CMC acquired the contract-manufacturing unit of Icos a few months after the local biotech success was acquired — and essentially dissolved — by pharmaceutical giant Lilly.

The announcement doesn’t bode well for the local biotech sector, as the expansion was a rare sign of growth in a year marked by distress among the area’s companies, many of which have flirted with disaster.

Some, like Sonus Pharmaceuticals (now OncoGenex Pharmaceuticals), have had to merge with other firms after the failure of experimental therapies; others, like Seattle-based Targeted Genetics, seem to be running flat out of cash.

The cancellation also reflects the toll taken by the recession, which makes it difficult to finance large projects and casts a shadow of uncertainty on market prospects for new ventures.

The company recently finished a $3 million remodel that enables it to go beyond manufacturing material for clinical trials, to producing market-ready drugs.

“Postponing the project enables us to forgo significant spending and helps ensure that we retain sufficient resources to better weather the economic slowdown,” Mahler said. He added that the company “has significant cash resources available to support our operation and growth plans.”

Bayer exec hired

In an effort to beef up sluggish sales of its compound to treat surgical bleeding, ZymoGenetics has recruited a senior Bayer sales expert to serve as president of the company and as director of a new division focused on the surgical business.

Stephen Zaruby, previously Bayer HealthCare Pharmaceuticals’ senior vice president overseeing hospital sales, will begin his new role Jan. 2.

The move underscores the reorganization of the Seattle biotechnology company’s top management team. President Doug Williams will replace Bruce Carter as chief executive next month.

Oncothyreon’s deal

German pharmaceutical giant Merck will buy the rights to manufacture Oncothyreon’s experimental lung-cancer vaccine Stimuvax for $13 million, the Seattle-based company said Thursday.

Merck already holds the commercialization and development rights, and now it will take over Oncothyreon’s manufacturing plant in Edmonton, Alberta.

The company, which moved its headquarters from Canada to the Puget Sound area last year, said it would lay off about eight employees in Edmonton, and will close its Tucson facility next year.

“By concentrating our activities in a single location with a team solely focused on clinical-development activities, we believe we will position Oncothyreon for success in the current challenging environment,” said Chief Executive Robert Kirkman.

He said the company could have about 25 employees in Seattle next year, about double the number now.

Ángel González: 206-515-5644 or