Merck plant in Durham, N.C. gets $105M to upgrade for J&J vaccine production

Merck
Merck has invested more than $1.6 billion in its manufacturing facility in Durham, N.C. Now the government will invest $105.4 million more in it to produce COVID-19 vaccines for Johnson & Johnson. (Merck)

On Wednesday afternoon President Joe Biden announced a government deal to secure 100 million doses of COVID-19 vaccine from Johnson & Johnson. This was on top of a previous U.S. agreement for 100 million shots from the drugmaker.

How can J&J, already facing supply difficulties in Europe and Canada, quickly produce these promised vaccines?

The answer has become clearer with news that J&J will use a sprawling Merck & Co. plant in Durham, N.C. to manufacture the bulk drug substance used to make the vaccines, according to the Raleigh News & Observer.

RELATED: Johnson & Johnson to sell another 100M coronavirus vaccine doses to U.S., taking America's supply to 800M doses: reports

The arrangement follows news last week that the two pharma giants, at the urging of the Biden administration, had made an unusual “wartime” pact, as one government official termed it, to collaborate on J&J vaccine production. Merck's own vaccine prospects had already failed.

Financial incentives helped broker the deal. The government will initially spend $105.4 million to “convert, upgrade and equip Merck facilities,” according to a release announcing the partnership. The government's total outlay to Merck for facility upgrades will be $268.8 million. Funds were procured through the Defense Production Act.

RELATED: Merck, Johnson & Johnson to strike 'wartime' COVID-19 vaccine manufacturing deal: WaPo

Merck is dedicating two of its manufacturing facilities to the effort. The other, in West Point, Penn., will provide the final step, filling vials with the finished substance and packing them for shipment. 

The Durham facility, on 262 acres, has 900,000 square feet of floor space and employs 800. Since it broke ground in 2004, Merck has invested $1.6 billion into the plant, which cranks out roughly 50 million vaccines a year.

In 2019, the company announced a $650 million expansion which would add more than 400 jobs by the end of 2022 as it stepped up production of its popular HPV drug Gardasil. 

Merck’s COVID-19 vaccine production could begin as early as May and could double Johnson & Johnson’s vaccine supply capacity, Andy Slavit of the White House COVID-19 Response Team said in a press briefing.