It's About the Money...Top 5 Global Pharma-Bio 2016 Project Investment Soars Past $4 Billion

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Reported by Annette Kreuger, Industrial Info Resources (Sugar Land, Texas)--While the majority of people bemoan the cost of prescription drugs, few understand the cost of producing those drugs. And this is after having invested billions in developing a drug. The production process is closely monitored, highly regulated and requires a huge capital investment. This fact is illustrated by looking at just the top five manufacturing projects scheduled to kick off this year, which reveals a total investment value (TIV) of $4.1 billion.

See below for a listing of the top five pharma capital investments.

Over $4 billion for only five projects, five sites. Scattered across the U.S. and Europe, some are grassroot projects for entirely new operations, while others are expansions of existing production plants. Even when removing the behemoth $1.8 billion Novo Nordisk AS (NYSE:NVO) (Bagsvaerd, Denmark) plan to construct a huge manufacturing campus in Clayton, North Carolina, the remaining four boast a healthy project average TIV of $575 million.

Bristol-Myers Squibb (NYSE:BMS)(New York City, New York) decided on Dublin, Ireland as the site for a $900 million project. Shopping around globally before finally settling on a hundred-acre site adjacent to its existing active pharmaceutical ingredients (APIs) plant, the company will build a large-scale biological production facility. With six 15,000-liter bioreactors (90,000-liter total capacity) and purification area, the 300,000-square-foot plant will manufacture multiple therapies from the company's growing biologics portfolio.

Active pharmaceutical ingredients (APIs), the component that makes a drug effective, account for two of the top 2016 manufacturing projects. In addition to the Novo Nordisk project mentioned above, Israel's Teva (NYSE:TEVA) (Petah Tikva, Israel) is looking at launching a $325 million APIs project this year in Ulm, Germany

Novo Nordisk continues its capex spree with a $760 million expansion at its hormone replacement/insulin production plant in Ballerup, Denmark. Siemens' (Munich, Germany) Healthcare Diagnostics division rounds out the year's current top five with a $300 million plan to renovate its diagnostics plant in East Walpole, Massachusetts.

None of these billions include what it will cost to staff these facilities once they are complete. Categorically, employees working in the industry, including production, tend to be on the higher end of any region's "average" pay scale. When one addresses the additional costs to insure, maintain and operate these plants, the costs, just like drug prices, spiral upward.

PROJECT_NO	Project TIV	Project Name	OWNER_NAME	Location
300256379	$300,000,000.00	EAST WALPOLE DIAGNOSTICS PLANT RENOVATION AND EXPANSION	Siemens Healthcare Diagnostics Incorporated	East Walpole	Massachusetts	U.S.A.
300257924	$325,800,000.00	ULM BIOPHARMACEUTICAL APIS ANTIBODY PRODUCTION UNIT ADDITION	TEVA GmbH	Ulm	Baden-Wuerttemberg	Germany
300254089	$760,100,000.00	MALOV HORMONE REPLACEMENT & INSULIN PRODUCTION PLANT EXPANSION	Novo Nordisk AS	Ballerup	Kobenhavn	Denmark
300191245	$900,000,000.00	DUBLIN CRUISERATH BIOLOGICS PRODUCTION FACILITY ADDITION	Bristol-Myers Squibb Company	Dublin	Dublin	Ireland
300235581	$1,850,000,000.00	CLAYTON GRASSROOT INSULIN ACTIVE PHARMACEUTICAL INGREDIENT (API) PLANT	Novo Nordisk AS	Clayton	North Carolina	U.S.A.

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