|Novo's U.S. operations president Jesper Høiland|
State and county incentives used to lure Danish drugmaker Novo Nordisk ($NVO) to build a $1 billion-plus API plant that will create about 700 jobs may cost taxpayers more than $130 million--a number not previously disclosed by public officials.
The Associated Press reported the numbers of the incentive program after reviewing documents it obtained through a public records request. The deal that lured Novo to build its first API plant in the U.S. and locate the facility in Clayton, NC, includes $110 million in tax rebates and infrastructure spending that was not disclosed publicly before, the news agency said.
The final incentive number, coupled with other state and local incentives, could reach the $130 million mark or more, because most of the tax breaks were based on the company investing $1.2 billion in the project. Jesper Høiland, president of Novo's U.S. operations, has said the drugmaker plans to invest $1.8 billion.
It's unclear if the commissioners of Johnston County--the county where the plant is located--knew the bottom-line figure on how much they were giving away in tax revenues when they approved the deal, the AP said. The disclosure of the size of corporate incentive deals falls on the shoulders of government officials and not on the companies, both an attorney who represented the drugmaker in the negotiations and a Novo spokesman told the news service.
In addition to the county tax breaks, Gov. Pat McCrory's administration said it would kick in about $19 million in tax breaks, grants and worker training, and an additional $10.5 million for road and other infrastructure improvements. Part of the money for the roads and infrastructure is offset by money from a nonprofit organization that spends part of North Carolina's cigarette lawsuit settlement money.
The drugmaker has said the new North Carolina plant will manufacture the active ingredients for oral semaglutide, the company's experimental daily oral treatment for Type 2 diabetes. The plant will also manufacture other current and future Novo insulin products.
Novo has been in a building mode in the past few years, adding a $100 million purification pilot plant at its new research facility in Bagsværd, Denmark, and a $100 million insulin plant in Russia.
- read the AP story