Fresenius Kabi bets $250M on upside of U.S. sterile injectables market

Germany’s Fresenius Kabi has found that being the go-to supplier for generic sterile injectables in the U.S. when a competitor has a manufacturing stumble can be a revenue booster. Now the drugmaker will have more capacity to do that as it invests $250 million to turn a U.S. site into a  showcase for its sterile injectable capabilities.

It is the second major expansion announcement from Fresenius Kabi in the U.S. this year, which in January agreed to buy a nearly new plant and small portfolio of products from Becton Dickinson ($BDX).

Fresenius Kabi today said it will start construction next year on a decade-long, multi-phase project to create a campus at its manufacturing site in Melrose Park, IL. Melrose Park is about 30 miles from Fresenius Kabi’s U.S. headquarters in Lake Zurich, IL. Its international headquarters are in Bad Homburg, Germany.

The project will include new buildings for automated aseptic filling lines, expanded lyophilization capabilities and formulation areas, as well as a warehouse. There also will be an administration building with conference center, laboratories, office space and cafeteria space, all of it tied to the existing manufacturing site, the company said today.

“Our goal is to expand our U.S. manufacturing capabilities while ensuring continued compliance with increasing regulatory and quality requirements and improve production capacity and efficiency,” Steven Nowicki, senior VP of global operations for North America, said in a statement.

The drugmaker, which has more than 500 employees at the Melrose Park site, didn’t say how many jobs might come from the expansion but said in an email today: "We anticipate job growth as part of the expansion, though we do not have specific numbers to share at this time." 

The company has about 2,500 people in its U.S. operation, which includes manufacturing sites in New York, Pennsylvania and North Carolina.

The plant in Wilson, NC, was picked up this year when Fresenius bought BD Rx, the sterile injectables business that Becton Dickson had started as a way to boost its syringe manufacturing sales. Terms of the deal were not disclosed, but Becton Dickson invested about $100 million to build the 115,000-square-foot plant which opened in 2010. The plant employed about 115 when it got its first FDA drug approval in 2012. At the time, BD had big plans, saying it intended to launch 20 to 30 products in the next few years, but it found the business more challenging than it had expected.

Manufacturing generic sterile injectable drugs is difficult but has been lucrative for those who can pull it off without too many hitches. Fresenius Kabi this month reported sales in North America were down for Q2 after a big quarter a year ago, but that for the first half of the year, they had grown 6% to $1.22 billion (€1.086 billion) “driven by persisting drug shortages as well as new product launches.”

That is not to say that Fresenius Kabi has not had its own manufacturing difficulties. In April the FDA posted two Fresenius recalls, one 96,000 units of the muscle relaxant cisatracurium besylate because of labeling issues, and for more than 48,000 units of the antipsychotic injectable drug haloperidol decanoate due to an out-of-spec test for an impurity.

- here’s the announcement 
- see the company's Q2 earnings release

Related Articles: 
BD exiting sterile injectables biz, selling plant and portfolio to Fresenius Kabi 
Fresenius Kabi issues separate recalls for drugs made at Illinois plant 
Thanks to shortages, Fresenius sees 9% sales growth at drug unit Kabi