North Carolina lands $600m Novartis vaccine plan

By Gregory Roumeliotis

- Last updated on GMT

Related tags Novartis Influenza

After a ruthless battle between US states, Novartis has selected
Holly Springs in North Carolina for its vaccine manufacturing plant
which will use novel cell culture technology to dramatically speed
up production - the first facility in the US to do so.

The new site will produce up to 50m doses of seasonal trivalent flu vaccines for US consumption and will have a capacity of up to 150m monovalent doses annually within six months of an influenza pandemic declaration.

The investment is a major boost to Novartis's plan to keep ahead of the competition in developing faster techniques for making flu vaccine, as the prospect of pandemic bird flu looms.

The Basel-based company has already submitted its first cell culture-derived influenza vaccine for commercial approval in the EU while US clinical studies of the vaccine, which began in 2005, are ongoing. The vaccines for the EU and US clinical trials have been produced at the Novartis site in Marburg, where the product was developed and further expansion is planned to supply the European market.

Construction at the North Carolina site is expected to start in 2007 with around $267m (€211m) invested in the next five years and up to $600m over time.

"Pending validation, licensing and approval, the facility could begin production as early as 2011, with full production expected to follow as early as 2012,"​ a Novartis spokesperson told

"We expect that the vast majority of positions will be filled locally, although some positions may be filled by Novartis employees who wish to relocate to the area."

The plant will create 350 jobs with an average annual salary of about $50,000, compared with the local average of $34,270.

According to a local newspaper report, Novartis will bag a maximum of $41.3m in state and local incentives for the facility, a determining factor in its decision to chose North Carolina over Georgia and Maryland.

These sweeteners include as much as $17.4m in land, construction and infrastructure incentives from the town of Holly Springs, $3.2m in tax credits and a sales tax refund of as much as $6.4m.

What is more, a $220m grant from the US Health and Human Services Department (HHS) awarded to Novartis last May to develop cell-based vaccines will also contribute to the investment in the plant.

The US government is eager to promote cell culture technologies for vaccines because they offer greater reliability and a reduction in production lead-time over egg-based production.

Current egg-derived vaccine manufacturing requires several months of logistics for ordering and receiving eggs, so this lead time can hinder the response to unanticipated demands such as the discovery of pandemic strains, production failures and seasonal influenza virus strain changes.

In contrast, flu cell culture production enables flexible, faster start-up of vaccine manufacturing, and is independent of the availability of eggs, providing an important advantage in the event of an influenza pandemic.

Apart from investing heavily in this technology, Novartis made its big entrance in the US vaccine manufacturing scene last April with the $5.4bn acquisition of Chiron, the troubled vaccine maker whose Liverpool facility was shut down in 2004.

In the company's second-quarter financial results announced this week, Chiron's acquisition weighted on Novartis's profits, wiping out some of its strong sales but still allowing a 7 per cent rise in pre-tax profit to $2.065bn.

Nevertheless, Novartis believes its latest investment in North Carolina is a smart one - it already employs about 680 people in the state at facilities in Greensboro and Wilson.

The area is certainly popular in the pharma industry with GlaxoSmithKline having its headquarters there and Merck and Wyeth building or expanding facilities nearby.

Yet although the Research Triangle in North Carolina has attracted around 80 pharmaceutical companies, it is not always the destination of choice in the US for big pharma; last month Bristol-Myers Squibb snubbed the region when its chose Devens, Massachusetts for its $660m biologics production facility.

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