Good Medicine: Pharmaceutical-Biotech Sector New Site Build Construction Investment Nears $20 Billion

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Reported by Annette Kreuger, Industrial Info Resources (Sugar Land, Texas)--As the global economic headache spirals into a migraine, the pharmaceutical-biotech industry capital injection is just what the doctor ordered. There is no shortage of grassroot construction within the industry, as a recent analysis of reported projects (Industrial Info Resources Pharmaceutical Biotech database) revealed 191 sites scattered across the globe translating into a potential total investment value (TIV) of $19.7 billion.

The 191 sites that are being actively developed represent a site average TIV of $104 million, underscoring why pharma-bio projects remain at the top of any economic developer's "get" list. All are in various stages of execution, from early site studies to actual construction. Renovations/repurposing of existing facilities for use by new owners/tenants are not included in this analysis. These projects are strictly "from the ground up."

Of the 191 sites, 112 have a future kick-off date and are worth nearly $10 billion in potential project spending. The "potential" investment for each site includes initial construction, as well as any reported planned future expansions and subsequent phases.

Now that the confusion in the industry as to whether a company is either/or "pharmaceutical or biotech" has finally morphed into a hybrid alphabet soup of "all of the above," toss in the medical device sector and one finds a gloriously convoluted industry that continues to deliver across the spectrum in capital investment.

And that spectrum is vast and inclusive of virtually every kind of manufacturing or research site the industry has to offer. While there are a number of smaller projects in the under $10 million range, the top project is just under $2 billion. Yes, $2 billion, with several more not far behind.

It wasn't so long ago when it was believed that the old school industry way of thinking "...Hey, it's Tuesday, let's build a new $200 million plant..." was going to remain an echo of the past. With lean new operational strategies and scores of plants being closed, it appeared the days of the pharma-bio mega projects were as dead as the dinosaur.

While not quite as cavalier with planning as in the past, the industry is seemingly back in the build-up mode once again. Now that the majority of outdated and redundant sites have been shed, thanks to new drug approvals and growing market demand, the call for both manufacturing and research sites is being heard around the world.

Click on the image for chart of new site build activity globally

Within North America alone, the industry has 112 sites being actively developed with a $14 billion TIV. 53 of those sites, representing $8 billion potential TIV, have a future kick-off date. The largest of the planned sites remains the nearly $2 billion plan by Novo Nordisk AS (NYSE:NVO) (Bagsvaerd, Denmark) to construct a huge manufacturing campus in Clayton, North Carolina. When complete, the site will produce the active pharmaceutical ingredient (API) for use in the production of insulin.

There is a lot of activity on the lower end of the investment scale, including such projects as a $10 million investment by Pharmacann LLC (Oak Park, Illinois) to construct a cannabis (marijuana) cultivation and processing plant in Hamptonburgh, New York. This is just one of many expected as more states change their laws regarding medical marijuana therapeutics.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.