Updates on the spread of H7N9 in China are a daily reminder of why the Department of Health and Human Services (HHS) gave Novartis ($NVS) $487 million to build its cell culture vaccine production plant. If H7N9 reaches the U.S., the country will be better prepared because of the investment.
Novartis, for its part, has continued to invest in the Holly Springs, N.C., facility. Almost exactly one year after opening the site, Novartis began adding a $36 million viral development lab and pilot production plant. Now, Novartis has outlined plans for a 38,000-square-foot technical services building on the campus. Novartis wants to complete the $60 million building within two years to help service an HHS chemical and biological threat response contract, Raleigh News & Observer reports.
The latest investment in Holly Springs suggests a level of commitment to the vaccine business. In the days after Dan Vasella quit as chairman of Novartis, some analysts and investors voiced their hope that the incoming leader would sell off the vaccine unit. Novartis got big in vaccines through the $7.5 billion takeover of Chiron in 2006, but the unit has struggled for consistent profitability. If Novartis was to become the latest Big Pharma to slice up its business, analysts would like to see vaccines on the block. The fact that the new chairman, Joerg Reinhardt, once headed up the vaccine unit casts doubt on the likelihood of a sale, though. Novartis maintains it is committed to the vaccine business, and Reinhardt has already toured the Holly Springs site.
Local and national government have both made financial commitments to get Novartis in Holly Springs and build out the nation's vaccine capacity. Last year Novartis, GlaxoSmithKline ($GSK) and Emergent BioSolutions ($EBS) each received a cut of a further $400 million from HHS. On a local level, Novartis benefited as the government bought the land and improved roads and other infrastructure.
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