Multimillion-dollar manufacturing outlays are becoming an annual tradition at Sandoz’s antibiotics plant in Kundl, Austria.
After similar moves in 2020 and 2021, Novartis’ generics arm on Monday said it would plug another 50 million euros (about $49.92 million) into its European production in a bid to boost capacity for finished dose form penicillins. In total, the company has planned more than 250 million euros of investments in its continental antibiotics network, Sandoz said in a release.
As for the latest project, Sandoz is constructing a new three-floor building connected to its existing penicillin production facility in Kundl, adding an additional 1,875 square meters (about 20,182 square feet) of real estate. The new plant, which Sandoz expects to have up and running by early 2024, will focus on bulk formulation and fill-finish for penicillins poised for global distribution.
The Novartis unit plans to deploy automation, "state-of-the-art-technology" and "simplified processing" at the site, boosting both capacity and supply resilience.
“This investment will help to meet that growing patient need, to support the creation of hundreds of new jobs, and to partially offset the impact of high energy prices by lowering unit costs," Richard Saynor, CEO of Sandoz, said in a statement.
Sandoz has unveiled its new penicillin strategy shortly after the company shrugged off threats to Europe’s generics industry raised in September by the trade group Medicines for Europe.
“It’s not a topic of concern,” Novartis CEO Vas Narasimhan, M.D., said on a conference call in response to the trade group’s warning about the consequences of a confluence of events, including the pandemic, the Ukraine conflict and the soaring costs of energy, transportation and raw materials.
“We believe we have built adequate contingency plans for energy to ensure our plants are adequately supplied and similarly are able to offset inflation through productivity measures,” Narasimhan said.
Novartis has been upgrading in Austria for the past three years straight. In the summer of 2020, Sandoz and the Austrian government said they would lay out 150 million euros ($176 million) over the next five years to improve antibiotics manufacturing at Kundl. At the time, the Novartis unit said the money would be used to develop cutting-edge manufacturing technology for active pharmaceutical ingredients and finished drugs.
Last May, Sandoz threw down 150 million euros ($183.32 million) more on the Kundl plant, plus another facility in Spain. For that investment, 100 million euros was earmarked to equip the Kundl plant with new production tech to produce oral amoxicillin, while the remaining 50 million euros went to Sandoz’s Palafolls site in Spain, where the company is adding new equipment and expanding capacity for sterile penicillin APIs and sterile API mixtures.