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| Daniel O'Day, COO of Roche's pharmaceuticals division |
There has been a big rush towards biologics manufacturing as drugmakers prepare for the new drugs that are becoming a larger piece of their portfolios. Swiss drugmaker Roche ($RHHBY) says it has 39 biologics in development. But while other companies are doing this piecemeal, Roche is rolling out a comprehensive expansion for large-molecule drugs and their delivery processes, investing 800 million Swiss francs ($881.8 million) to boost its production in three countries including the U.S. The buildup will also mean 500 new jobs over the next 5 years.
"As the world's largest supplier of biologics, Roche is committed to making the necessary investments to ensure ongoing supply of these medicines at the highest quality standards," Daniel O'Day, chief operating officer of the pharmaceuticals division, said Monday.
Roche is spending 190 million Swiss francs ($208.9 million) in a new antibody-drug conjugate (ADC) production facility in its home base of Basel, Switzerland, that will create 50 jobs. ADCs are able to target specific cells, delivering drugs where they are needed. It said that facility will give it "additional capacity and flexibility" for Kadcyla, its first approved ADC, as well as 8 ADCs it is has under development. Its new breast cancer treatments Kadcyla and Perjeta have both been fast out of the gate, adding significantly to the drugmaker's sales.
It will invest another 260 million Swiss francs ($285.9 million) to expand biologic manufacturing capacity at its facilities in Vacaville and Oceanside in California, and 350 million Swiss francs ($384.9 million) on beefing up its operations in Penzberg, Germany. The U.S. investments will add about 250 jobs and the German investment another 200, the company said. Roche didn't give any start or complete dates for the work but said it will boost its capacity over the next 5 years.
Roche is the leader in biologics, which are large-molecule drugs made from living cells rather than chemical synthesis. But Vontobel analyst Andrew Weiss pointed out to Reuters that Roche has one of the leanest manufacturing networks in Big Pharma, with only 15 manufacturing sites globally.
These production investments are not the only way the drugmaker is preparing for a build-up. It is spending about $105 million on a new training center at a plant in Kaiseraugst in northern Switzerland that handles quality control and drug packaging. The company has reportedly added about 500 jobs at the facility in recent years as its production has been growing.
Other drugmakers and contract manufacturers are piling on investments in their biologics and ADC manufacturing capacity globally. Competitor Novartis ($NVS) is putting $500 million into a new biologics plant in Singapore. Swiss contract manufacturer Lonza early this year said it would double its ADC production capacity at its plant in Visp, while German drugmaker Boehringer Ingelheim is building a $45 million plant in China that will do contract work there. But many other drugmakers are also expanding capacity.
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