Biotech company expands manufacturing in Lodi

By Reed Fujii

Posted Mar. 24, 2016 at 6:07 PM

Cepheid, a Sunnyvale-based producer of medical diagnostic products, is expanding its Lodi manufacturing operation, looking to grow to about 500 employees in two to three years from the current 230 workers, the company and area business officials said.

With its existing facility at 225 N. Guild Ave., Cepheid purchased two buildings to the south on Guild Avenue that have been vacant since 2008 when Blue Shield left to occupy its new facility in south Lodi.

Those include a 40,000-square-foot building to be used for manufacturing, essentially an extension of production now done in Sunnyvale, and a 32,000-square-foot building to be used for administrative offices, meetings and training.

The company said initial construction should be completed late this year, when it expects to have about 270 employees in Lodi, up from the current 240-person work force. Eventually, it projects 500 Lodi workers.

Officials declined to break out Cepheid’s investment in Lodi.

In deciding to expand in Lodi, Warren Kocmond, Cepheid’s president and chief operating officer, cited the high quality of plastic cartridges made in Lodi for the company’s diagnostic products, as well as the region’s seismic safety:

“With the two new buildings, we are expanding our manufacturing footprint even further with new cartridge assembly lines at the site,” he said in a statement. “Given the seismic risk associated with locating our primary manufacturing operation in Sunnyvale, the Lodi expansion is an important element of both our long-term growth and business continuity plan.”

Pat Patrick, chief executive of the Lodi Chamber of Commerce, said he was excited by the news of the biotech firm’s expansion.

“Cepheid is a leader in their industry, and where leaders go others will follow,” he said this week.

Michael Ammann, president of the San Joaquin Partnership, said he also talks about seismic safety when he’s trying to entice Bay Area companies to relocate or expand in San Joaquin County.

“I’m continuously wearing my earthquake tie,” he said, explaining the front of the tie features a “big red fault line,” and Stockton is on the flip side.

Ammann also applauded Cepheid’s decision.

“It shows that Lodi is working together in all aspects to facilitate the growth of high tech in their community,” he said.

He suggested, however, that the city also needs to have more real estate zoned and ready for commercial development to capture more of that growth.

Patrick noted that Cepheid has had a long relationship with Lodi, initially buying plastic parts for its products from Quashnick Tools in Lodi, then buying Quashnick in 2012 and expanding its molding injection operations.

Former owner Terry Quashnick remained with the operation and helped bring Cepheid’s expansion.

“He’s a big Lodi cheerleader,” Patrick said.

Cepheid describes itself as “the fastest growing company in molecular diagnostics,” whose systems can rapidly and accurately test for many diseases, including tuberculosis, socially transmitted diseases, specific types of cancer and influenza.

Globally, it has more than 1,700 employees. Besides Lodi and Sunnyvale, it also has a manufacturing facility in Solna, Sweden.

For 2015, Cepheid reported a loss of $48.5 million, or 67 cents per diluted share, on revenue of $539 million. That compares to a 2014 loss of $50.1 million, or 72 cents per diluted share, on revenue of $470 million.

Its stock, traded on the Nasdaq exchange under the ticker symbol CPHD, closed Thursday at $30.91, up 37 cents per share for the day.

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