It's a Wrap! Pharma-Bio Sector to Complete More than $14.5 Billion in Construction Projects in 2015

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Reported by Annette Kreuger, Industrial Info Resources (Sugar Land, Texas)--By the time 2015 draws to a close, the North American Pharmaceutical & Biotech Industry is on course to have completed construction on more than $14.5 billion worth of capital and maintenance investments, according to Industrial Info's project database. Spread over 728 individual projects, construction will have ended between January 1 and December 31, 2015.

The projects completed in 2015 represent an average total investment value (TIV) of $20 million each. Of course, from an investment standpoint, there is a wide spread from top to bottom: from a $1 million regularly scheduled maintenance program, all the way up to huge projects valued at hundreds of millions dollars.

Click on the image at right for a chart detailing 2015 North American Pharma-Biotech Industry project completions by market region.

One of the largest 2015 project completions expected this year is drug giant Novartis AG's (NYSE:NVS) (Basel, Switzerland) $600 million expansion at its Institutes for Biomedical Research (NIBR) in Cambridge, Massachusetts. When complete, the company will have added more than 550,000 square feet of space, bringing its total space in the city to more than 1 million square feet.

Under a lease agreement with Massachusetts Institute of Technology (MIT) for an additional 4-acre parcel, the company is renovating an existing 33,000-square-foot facility (Building N42) and constructing two more, including one at seven stories that is 262,000 square feet, and another at eight stories that is 277,000 square feet.

The project team includes Cannon Design (Boston, Massachusetts) and Skanska USA (Boston), along with Maya Lin, the artist who designed the Vietnam Veterans Memorial in Washington D.C. The spaces will allow collaboration and cross-disciplinary communication and research. With flexible laboratory spaces that can accommodate multiple avenues of sciences, the project is set to achieve a LEED Gold certification.

Novartis made news and won the hearts of Cambridge locals in 2004 when it chose the city as the new global headquarters of the NIBR, and picked the 500,000-square-foot former New England Confectionery Company (NECCO) Candy building as the site. The NECCO building, when first opened in 1927, was the world's largest candy-manufacturing plant.

Project completion data become more valuable as the projects age, an approach that is different from analyzing early-stage projects. Historical analysis of completed projects offer insight into what is yet to be. Old data can reveal clues and patterns, as well as future possibilities.

For instance, consider the aforementioned Novartis project. Whenever "phase" is mentioned on a former project, it often indicates there is more to come. In this case, the first project on this site was written back in 2002, was worth $50 million, and included "phase" in its name.

Did that one word serve as a harbinger of the future investment? The second Novartis Cambridge project was tracked for over five years, during which time it was "officially" denied repeatedly, eventually doubled in size and quadrupled in value before it finally went to construction in 2012. The clues were there from the start.

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.