Pharma-Bio 2Q14 Update: $9 Billion in Project Starts Reflects 91% Gain in Industry Capital Investment

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Reported by Annette Kreuger, Industrial Info Resources (Sugar Land, Texas)--When June 2014 draws to a close, the Pharmaceutical-Biotech Industry is forecast to have launched nearly $9 billion worth of North American capital and maintenance projects during the previous three months. The stunning number reflects a 91% increase over last year's figures.

Click on image at right for breakdown of North American capital and maintenance projects in the Pharmaceutical-Biotech Industry in second-quarter 2014 by market region.

An analysis by Industrial Info's Pharmaceutical Tracker - Online Database of active capital and maintenance (MRO) projects reveals a 91% jump in spending--from second-quarter 2013's $4.7 billion to $9 billion for second-quarter 2014--representing a gain of $4.3 billion. In terms of actual project counts, it was another gain for second-quarter 2014, moving up to 242 from the 134 launched during second-quarter 2013.

What is even more encouraging about the second-quarter 2014 statistics is that the projects' average total investment value (TIV) increased, which is often not the case with higher project counts. This quarter's average TIV for each of the 242 projects is $37 million, a 16% increase from $32 million in the same period last year.

The stunning second-quarter 2014 performance is boosted by several very large projects. The largest is the expected launch of the $730 million Facility for Rare Isotope Beams (FRIB) at Michigan State University's Lansing campus. The project team is huge, and includes SmithGroup JJR Architects (Detroit, Michigan) and general contractor Barton Malow (Southfield, Michigan). The final design of the FRIB conventional facilities--the tunnel and support buildings--is complete and ready for civil construction to begin in early spring 2014. Pre-construction site preparation is complete, and the final design of the technical systems, including the accelerator and experimental equipment, is under way and planned for completion in 2014. Plans call for the FRIB to be finished in 2018 and operational by the summer of 2020.

Another of the major projects is the $714 million National Bio and Agro-Defense Facility (NBAF). While funding for the nearly 600,000-square-foot research facility, slated for Manhattan, Kansas, is still subject to debate in Washington, the most recent news has it set to launch construction this year. The national lab will replace the aging Plum Island Animal Disease Center (PIADC) in New York. Filled with elaborate laboratories ranging in biosafety levels (BSL) 1 through 4 (with the BSL-4 labs researching the most lethal of diseases and germs), the focus of study will center on integrated human, foreign animal and zoonotic diseases, as well as the development of large livestock vaccines. The project team includes designers Perkins + Will (Atlanta, Georgia) and a joint venture by McCarthy and Mortenson (McMjv) as construction managers.

Not all of the second-quarter 2014 projects are institutional or publically sourced, nor are they worth hundreds of millions of dollars. Anthrax vaccine manufacturer Emergent Biosolutions (NYSE:EBS) (Rockville, Maryland) is expected to start the $91 million second phase of a major expansion of its Lansing campus. The project will include the construction of a new cold storage warehouse and a science building, and the renovation/upgrade of existing manufacturing operations and power plant. Integrated Project Services (IPS) (Indianapolis, Indiana) worked on the conceptual design and programming for the project.

Click here to gain instant access to the all-new 2014 North American Pharmaceutical-Biotech Outlook.

A bit further south, Endo Pharmaceuticals (NASDAQ:ENDP) (Dublin, Ireland, and Malvern, Pennsylvania) and its generic manufacturer, Qualitest Pharmaceuticals, are reported to be preparing for a $100 million expansion and upfit of its manufacturing campus in Huntsville, Alabama. The plan will be broken into multiple smaller projects over the next several years and will be spread out on the nearly 800,000-square-foot campus (180,000 square feet for generic liquids manufacturing, 280,000 square feet for generic solid dose manufacturing, and 320,000 square feet for warehouse/administrative).

The projects themselves attest to the wide variety of sectors and individual project types within the industry. Although research-based projects remain the No. 1 dollar magnet, there nevertheless remains a healthy number of manufacturing sites set to launch. Although the majority of the referenced projects will go to construction, there remains a chance that any of them may be cancelled, delayed or put on hold at any moment. Such is the nature of virtually any construction project.

Industrial Info's Pharmaceutical-Biotech Database coverage includes both manufacturing facilities and research laboratories. In addition to commercial operations, the public sector is included as well, due to its enormous volume of capital spending. Our North American Pharmaceutical-Biotech plant and project database continues to grow on a nearly daily basis.

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Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three 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.