Merck KGaA injecting €150M into biologics site where it makes immunotherapies

Just a week after promising a €1 billion investment in its headquarters manufacturing site in Germany, Merck KGaA says it will also invest €150 million into its biologics site in Switzerland.

The drugmaker says the five-year plan will expand and upgrade the facility in Aubonne, to make drugs including fertility treatment Gonal-f as well as Bavencio, the immunotherapy it shares with Pfizer, and bintrafusp alfa, a new I-O cancer drug candidate it will develop with GlaxoSmithKline.

This investment “is an expression of our confidence in the future growth of our Healthcare business sector, Belén Garijo, a Merck executive board member said in a statement.

The $132 million will pay for a new facility to house upgraded quality control labs and aseptic filling lines with isolator technology. One line will be dedicated to freeze-dried formulations and the other to liquid formulations, the company said.

The filling lines and quality control labs are replacing existing infrastructure with more sophisticated technology and will allow the company to boost capacity to 27 million vials per year, Merck explained. Those two lines will replace four that currently produce about 18 million vials, a spokesperson said today in an email.  

The drugmaker expects to complete construction of the new building in 2020, to have the quality control labs operational in 2021 and the new lines for aseptic filling completed in 2023. There are roughly 775 employees working at the manufacturing site now and another 228 in offices at the site. The company says it can't predict whether any new workers will be needed when it is complete.

RELATED: Merck KGaA investing €1B at headquarters site as part of 5-year work agreement

The news of the Aubonne investment follows last week's announcement that the drug and materials maker has nailed down five-year work agreements with employees at its HQ site in Darmstadt, Germany, and promised to invest €1 billion in infrastructure and training at the site. The agreement, which covers the 11,000 employees in the Darmstadt area through 2025, is to secure the key manufacturing site’s “future viability,” the company said.

The investments in Switzerland come as Merck continues work to make a mark in immuno-oncology. Merck and Pfizer have had difficulty getting traction for Bavencio (avelumab), the fourth-to-market PD-1/PD-L1 therapy that competes with I-O blockbusters Keytruda and Opdivo. Last week, they scrapped a third late-stage trial in ovarian cancer.

Last month, however, the drugmaker announced a new effort in the field with GSK focused on M7824 (bintrafusp alfa), a bifunctional fusion protein immunotherapy that is currently in the clinic, including potential registration studies, for a series of solid tumors. Merck will get €300 million upfront with milestone payments of up to €500 million and potential sales of €2.9 billion, assuming it makes it all the way to finish line.