McKinney, Cafero Call for Public Hearing to Review Details of Alexion Deal

June 19, 2012

State Senate Republican Leader John McKinney (R-Fairfield) and State House Republican Leader Lawrence F. Cafero Jr. (R-Norwalk) today called for a public hearing to review the details of the state’s latest economic development deal with Alexion Pharmaceuticals, Inc. The Republican leaders have consistently stated that the First Five program should not be exempt from legislative and public review. They called for public hearings in the wake of the Jackson Laboratories announcement and successfully fought to remove a controversial proposal from last week’s budget implementer that would have shielded the First Five program from the state’s Freedom of Information Act.

“Ultimately, I hope this is a good investment for the state of Connecticut, but the public and the legislature have a right to know more about the deal,” McKinney said.

Cafero said, “Alexion is a world-class Connecticut-based company that will be a leader in its industry for the foreseeable future, but it is unclear at this time that $51 million in state incentives are necessary to keep them here.”

The leaders asked, “What are the specific terms of the agreement? What protections are in place to secure the taxpayers’ investment? What kinds of jobs will be created and which ones will qualify the company to have its loan forgiven? Did the state work with Alexion and Cheshire officials to exhaust every idea for keeping the company in Cheshire? What is the cost to the Town of Cheshire, and what, if anything is the state doing to help the Town and its property tax payers absorb those costs?”

McKinney pointed out that “Alexion is flush with cash.” He noted that the company finished 2011 with cash, cash equivalents, and marketable securities totaling $541 million (up from $362 million in 2010), and that it announced a stock sale in May to raise more than $450 million in additional operating capital. The company’s stock price has more than doubled over the last year (43.78 52-week low to 98 today).

“If $51 million in incentives are necessary to keep such a rich and successful company in Connecticut, then the business climate Democrats have created here is even worse than we thought,” McKinney said. “It seems clear from newspaper reports that Alexion has long anticipated outgrowing its Cheshire headquarters, but nonetheless planned to stay in Connecticut. I want to know if Alexion planned to go forward with its move and expansion regardless of the First Five incentives.”

“The First Five initiative is supposed to maximize the state’s return on investment in terms of economic development and job creation. We need more information to determine whether or not this deal accomplishes that goal,” Cafero added.