25 Feb CT: Alexion repaid $28M in Dec.
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Alexion Pharmaceutical’s decision to eventually relocate global headquarters to Boston cost the New Haven drug maker $28 million in "clawbacks” of state financial assistance received in recent years to fund its expansion and hiring, the state says.
Department of Economic and Community Development (DECD) Commissioner Catherine Smith said Alexion in December remitted to the state a check for $28.13 million.
Smith disclosed the Alexion clawback in response to questions during Friday’s State Bond Commission meeting, at which the $35.5 million was bonded for DECD to fund its business expansion and retention efforts.
During Friday’s session, in which Gov. Dannel P. Malloy presided as chair, a commission member questioned why the state, amid its fiscal troubles, continues to disburse loans, grants and other financial assistance to Connecticut and out-of-state companies that commit to locating, expanding and hiring in the state.
Smith pointed to the merits of the state’s "First Five” and Small Business Express Loan efforts. But she also noted that DECD has aggressively pursued clawbacks from aid recipients who fail to live up to their job-retention/job-creation commitments under its "First Five” and Small Business Express Loan initiatives. Those initiatives have largely been funded with money Connecticut taxpayers borrowed from institutional and other investors.
According to DECD, Alexion’s clawback payment included $20 million in loan forgiveness, plus $791,782 in accrued interest; a $6 million grant; and a $1.34 million "relocation penalty.”
Alexion was a "First Five” state aid recipient.
Alexion did not immediately respond Tuesday to an email seeking comment.
As previously reported, the loan was used to establish the rare disease drugmaker’s current location in New Haven, from Cheshire, where it had headquarters for a number of years. The grant enabled lab construction there.
But last September, Alexion abruptly announced it was cutting workforce by 20 percent and relocating headquarters to Boston. The company said it will move 400 workers to Boston, but keep 450 in New Haven.