Pharmaceutical-Biotech Global Build Report: Top 5 Projects Deliver $4 Billion Investment

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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 that have or will kick off this year, which reveals a total investment value (TIV) of $4.1 billion.

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 whopping project average TIV of $575 million.

Bristol-Myers Squibb (NYSE:BMS) (New York, 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) launched a $318 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.

French drugmaker LFB Biomedicaments S.A. (LFB Group) launched its $357 million project "Usine 2020" in Arras, France. The company purchased a 40-acre (16 hectares) site within the Actiparc Arras to build the complex that will allow LFB to triple their global production of plasma-derived medicinal products within the next ten years, especially in the field of immunoglobulins, albumin and fibrinogen. Combining all phases of production of these medicinal products, from plasma fractionation up to the aseptic packaging of both liquid and lyophilized products.

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 Number	Total Investment	Project Name	KICKOFF	COMPLETION
300235581	$1,850,000,000	CLAYTON GRASSROOT INSULIN ACTIVE PHARMACEUTICAL INGREDIENT (API) PLANT	Nov. 2016	31-Aug-20
300191245	$900,000,000	DUBLIN CRUISERATH BIOLOGICS PRODUCTION FACILITY ADDITION	Apr. 2016	29-Nov-19
300254089	$742,400,000	MALOV HORMONE REPLACEMENT & INSULIN PRODUCTION PLANT EXPANSION	Apr. 2016	30-Oct-19
300281322	$357,100,000	ARRAS "USINE 2020" SAINT-LAURENT-BLANGY PLASMA-DERIVED PRODUCTS GRASSROOT PLANT	Aug. 2016	9-Oct-20
300257924	$318,200,000	ULM BIOPHARMACEUTICAL APIS & BIOSIMILARS PRODUCTION UNIT ADDITION	Oct. 2016	30-Jan-19

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