Pharmaceutical-Biotech Capital Investment Update: North American Spending Could Surpass $17 Billion in 2006

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Researched by Industrial Info Resources (Sugar Land, Texas). A recent analysis of North American project activity (reference: Pharmaceutical Tracker - Online Database) has discovered that there are currently 322 projects, representing over $17 billion in total investment value (TIV), scheduled to begin throughout 2006. Comprised of projects large and small, the spending covers everything from simple plant upgrades to the construction of major manufacturing plants. Much of the spending activity has been spurred by the race to develop and produce vaccines for a variety of maladies. A good number of the projects are for the addition or expansion of some sort of biologics or biopharmaceutical production capacity.

Click on the image at right to view a chart showing the breakdown of spending by market region.

Bristol-Myers Squibb (NYSE:BMY)(New York, New York) currently leads the pack, in terms of TIV for an individual project, with plans to construct a grassroot biologics plant in the tiny town of Devens, Massachusetts. Scheduled to begin construction later this fall, the investment could eventually top $1 billion. BMS was courted by legions of suitors from across the nation that were all very eager to snag such a major project.

Amgen (NASDAQ:AMGN)(Thousand Oaks, California) will keep the engineering and construction trades busy as the company is spending over $2 billion to expand and upgrade existing sites. In projects scattered among a number of sites from California to Puerto Rico, the company is systematically beefing up both research and production capacity. Genentech (NYSE:DNA)(South San Francisco, California) made the small town of Hillsboro, Oregon, very happy with its selection as the site for a major fill and finish plant.

Medimmune (NASDAQ:MEDI)(Gaithersburg, Maryland) has embarked on a $250 million major expansion of their manufacturing site in Frederick, Maryland. MannKind is set to kick off construction of a $107 million biopharmaceutical manufacturing plant expansion in Danbury, Connecticut.

The public sector rivals the private sector in terms of spending. The $200 million National Biosafety Laboratory in Boston is just one of the major pubic projects. The feds are spending hundreds of millions of dollars on their own laboratories at various sites to continue to devise therapies to combat a multitude of biological threats.

Often funded by a combination of public and private funds, universities across the nation are investing heavily to strengthen their research infrastructure. In addition to an often common goal of uncovering treatments for an assortment of illness, these schools also hope to attract major federal research dollars and the attention of pharmaceutical-biotech companies looking to locate near a steady supply of “intellectual capital”.

As it has throughout the year, the Mid-Atlantic region continues to lead in project spending. Currently holding title to 49 projects valued at just over $3.1 billion, the region remains just ahead of New England with its own cache of projects worth $2.8 billion. Interestingly, New England’s average project TIV is much higher, as the region’s spending is for 22 projects, which is less than half of the total for the Mid-Atlantic.

It is easy to curse Big Pharma for its sometimes questionable business practices, be it something as just plain irritating as being bombarded by butterflies floating across the television screen promising sleep or the more serious impact of negative drug side effects. Negative headlines aside, it is evident that this often-beleaguered industry brings a lot more to the table than our good health. It is a fact that virtually every country in the world and every state in the union actively vie for a piece of the lucrative pharmaceutical-biotech capital investment pie. The above-average jobs, the clean work environment and the ancillary benefits to the surrounding communities, businesses, schools and its people are just too much to pass up.

Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 23 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.