Pharmaceutical-Bio Industry Launches 2010 with $1.4 Billion in First-Quarter Capital and Maintenance Project Starts

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Reported by Annette Kreuger, Industrial Info Resources (Sugar Land, Texas)--In the middle of the first quarter, the Pharmaceutical-Biotech Industry is on tap to launch $1.4 billion worth of North American projects before the end of March. The investments are spread over 82 projects, resulting in an average project cost of $17 million. It is a good start to what all are hoping will be a year of recovery.

While still turning out the high project average total investment value (TIV) that vendors to the industry have come to expect, the first-quarter 2010 figures are down 17% from the first-quarter 2009 results. Looking back to 2009, a total of 78 projects with a combined TIV of $1.7 billion began construction during the first quarter, according to Industrial Info's Pharmaceutical Tracker - Online Database. Last year's first-quarter project average also was a bit higher, averaging $22 million. Nothing drastic, and in light of the fact that last year's first-quarter projects were not as badly impacted by the ensuing financial meltdown as those up for 2010, the stats are really rather encouraging.

As was the case last year, the vast majority of this quarter's projects are for new research facilities, although there are several impressive projects that will add new production capacity. Dendreon (NASDAQ:DNDN) (Seattle, Washington) launched construction of a $70 million manufacturing plant in Seal Beach, California. The project team includes A&E LifeTek Solutions (Blue Bell, Pennsylvania) and Turner Construction (Los Angeles). The company will use the plant, along with two others in Atlanta and Morris Plains, New Jersey, to begin commercial production of oncology treatment Provenge.

Originally envisioned as a $394 million investment, Shire Human Genetic Therapies, a division of the U.K.'s Shire plc (NASDAQ:SHPGY), is pumping another $66 million into its massive biopharmaceutical production campus in Lexington, Massachusetts. Team members on the project, known internally as HGT Project Atlas, include Bovis Lend Lease (Boston, Massachusetts), CRB Consulting Engineers (Plymouth Meeting, Pennsylvania), and KlingStubbins (Cambridge, Massachusetts).

A regional look at the dollar numbers puts the West Coast in the top spot, with $305 million divided into nine projects. That translates to a healthy $34 million-per-project average TIV, with California gratefully accommodating the majority of the quarter's activity. Beyond the aforementioned Dendreon project, the region anticipates the start of the $125 million NOAA Marine Laboratory consolidation project in La Jolla, California. Aided in part by federal stimulus funds, the project will add a four-story, 124,000-square-foot Gold LEED building for marine-based research into a number of fields, including genetics and biotechnology.

Irish drugmaker Elan Corporation (NYSE:ELN) is expected to proceed with a $50 million expansion of its research and development (R&D) campus in South San Francisco, California. Chamberlin Associates (Pleasanton, California) is the developer, and JM O'Neill is the construction manager.

The Rocky Mountains region is next up for the quarter, with $206 million invested in eight projects, resulting in a lucrative project average TIV of $26 million. Watson Pharmaceuticals (NYSE:WPI) (Corona, California) is poised to invest up to $50 million to build-out and equip an existing 100,000-square-foot building at the company's manufacturing and R&D site in Salt Lake City, Utah.

Rounding out the top three is the Great Lakes region, with 12 projects representing $179 million scheduled to begin before the end of March. The largest of these is Medpace Incorporated's plan to spend $60 million on the first of three planned LEED-certified buildings on the 29-acre Red Bank Road site in Cincinnati. Project team members include RJM Consulting (Cincinnati, Ohio) and Design-Build Al Neyer Incorporated (Cincinnati, Ohio).

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Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project spending opportunity databases, market forecasts, high resolution maps, and daily industry news.