Novartis radiotherapy unit snags tax abatement for $72M Lutathera plant

The plant, pictured above, will initially produce Lutathera, a radioligand drug that combines a therapeutic molecule with a radioactive particle that binds to tumor markers. (Novartis/Advanced Accelerator Applications).

Back in June, Novartis' Advanced Accelerator Applications laid out plans for a radiotherapy manufacturing plant at Indianapolis' Purdue Research Park. Now, the company has unveiled its budget for that effort, and it's won financial perks from local authorities, too.

The roughly $72 million project won approval Monday for a 10-year, $6.5 million tax abatement by the Indianapolis City-County Council, local outlet IndyStar reported

The facility is blueprinted at 60,000 square feet, with 10,000 square feet of offices and another 50,000 square feet of production space, an AAA spokesperson said via email. The project, set to kick off work in 2023, will see the company recruit some 50 to 60 new staffers, he said. 

The plant will produce AAA's cancer med, Lutathera, as well as other radiotherapies, the Novartis unit first announced in June. 

Lutathera, approved in 2018 to treat neuroendocrine tumors, is a "radioligand"—a drug that pairs a therapeutic molecule with a radioactive particle that binds to tumor markers. AAA also has another radioligand therapy, 177Lu-PSMA-617, which is now in phase 3 testing for prostate cancer. 

RELATED: As Novartis' other cancer launches struggle, Lutathera gets off to flying start

The new facility will house four manufacturing lines and quality control laboratories for production of the products, with room to expand to eight manufacturing lines in the future, the AAA spokesperson said. When all is said and done, the site will boast capacity for up to 85,000 radioligand doses per year, doubling the company's current output, he said. 

Located near the Indianapolis International Airport and a FedEx hub, the new site will position the company to roll out the therapies across North America within 24 to 72 hours of production, the spokesperson added. 

The Indianapolis facility will mark AAA's second U.S. production plant. The first, located in Millburn, New Jersey, opened its doors in summer 2016 and serves as a distribution center for the company's Netspot (gallium Ga 68 dotatate) and Oxygen-18 enriched water—both used in positron emission tomography (PET) to hunt for diseases in the body. 

RELATED: Novartis accused of gaming Europe's orphan program to price Lutathera sky-high

Novartis got its hands on blockbuster-in-waiting Lutathera back in 2017 when it shelled out $3.9 billion to acquire AAA. The drug bagged $441 million in 2019 sales, jumping 31% in the fourth quarter alone, while analysts have predicted peak sales somewhere in the range of $1 billion to $2 billion.

Meanwhile, Novartis and AAA aren't the only drugmakers to snare tax breaks in Indianapolis—a move that in at least one case was met with less-than-stellar reception.

After the Indianapolis City-County Council in 2019 approved a $7 million abatement for a $91 million Eli Lilly expansion project in the city, Democrats and Republicans who voted against the deal suggested the financial incentive was unneeded by Lilly and would not benefit Indianapolis itself.