Two Pharma Giants Invest More Than $100 Million in Capital Project Spending in Nebraska

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Researched by Industrial Info Resources (Sugar Land, Texas)--Two of the world's largest pharmaceutical companies are collectively investing more than $100 million to expand operations in multiple projects at their existing sites in Lincoln, Nebraska. Pfizer (NYSE:PFE) (New York, New York), a major developer and producer of human and veterinary pharmaceutical medications, and Novartis (NYSE:NVS) (NYSE: NVS) (Basel, Switzerland) are expanding.

Pfizer's largest veterinary pharmaceutical manufacturing plant is in Lincoln, and the company performed the expansions in a three-phase project series. With an estimated total investment value (TIV) of $76 million, one of the phases consisted of a new $15 million lab that will test new products. The second phase included an investment of $26 million to install equipment for the production of a diphtheria toxoid product. The bulk of the company's capital spending was a $35 million investment that increased overall dosage capacity by 50% to 45 million vials per year. Additionally, another expansion was recently completed at the Lincoln site that increased lyophilization capacity and will also give the facility the capability to fill, freeze dry and cap single-dose products at the same site.

Novartis is nearing completion of a $25 million expansion to increase operations of its over-the-counter (OTC) pharmaceutical division at its Lincoln plant. This OTC expansion includes increasing production capacity of four brand-name products that were purchased by Novartis from New York City-based company Bristol-Myers Squibb (NYSE:BMY) (NYSE:BMY) for $660 million in September 2005. The OTC pain reliever Excedrin, is one of the medicines that were included in the BMS purchase and is the main focus of the Lincoln expansion, which began in May 2006. This will entitle Novartis to exclusively produce this pain reliever worldwide. When Excedrin production is fully operational at full capacity, Novartis will move forward with increasing production of the other products, including Comtrex, No-Doz and Bufferin. When the Lincoln site is fully operational, pill-capacity production will have tripled from 2 billion to 6 billion doses per year. Novartis' Lincoln plant also produces Benefiber, Tavist-D and Triaminic medicines and upon completion of the major expansion will be one of the industry's largest OTC production sites.

Interestingly, Lincoln was chosen for these major expansion projects over some of the more well-known life science hubs because of the city's significant concentration of employment in the biosciences industry. Having considered several other locations, Pfizer decided to expand in Lincoln, due in part to its successful local experience in producing a wide range of animal health products.

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