GSK's new manufacturing investments in the U.K. now pass $1 billion

GlaxoSmithKline, which is already investing £500 million in new manufacturing facilities in its U.K. home, will spend £200 million ($330 million) more to upgrade plants and build a technology center. The company, an early adopter of continuous processing, says the center will be all about new manufacturing and supply-chain technologies.

Glaxo ($GSK) will erect a manufacturing facility at its Ware, Hertfordshire, complex to make its new-generation Relvar Ellipta inhaler, which it developed there. Sold in the U.S. under the Breo brand, the treatment for chronic obstructive pulmonary disease was approved by the FDA in May and in Europe last month. It is forecast to reach $1.3 billion in peak sales. The drugmaker will also add a bulk sterile building and filling line at its Worthing, Sussex, facility to produce Augmentin for export to 150 countries. The older antibiotic product is sold primarily in emerging markets but generated £465 million ($762 million) in the first 9 months of 2013.

Last year, the company thrilled U.K. politicians when it announced plans to invest more than £500 million ($790 million) in manufacturing projects, creating 1,000 jobs. Two manufacturing sites in Scotland were earmarked for upgrades, but the crown jewel of the outlay is a new plant in Ulverston, Cumbria. It is GSK's first new facility in the U.K. in four decades. The company credited a special tax break the U.K. put in place last year as the impetus for building there and Tuesday credited it with its new upgrade plans. With the new plans, its investment in new manufacturing and upgrades in the U.K. now totals about $1.15 billion.

As for the technology center, GSK said Tuesday it is leaning toward building it in Ware, where it has both manufacturing and R&D facilities in one location. GSK says it wants the center to transform "emerging science and technologies into practical manufacturing applications." It will research such things as the use of enzymes and biologically inspired catalysts as well as nanotechnology that could be more precise and effective while reducing side effects. It said it will also investigate supply-chain processes.

GSK intends to use continuous processing technology in some of its new plants. The process gets away from batch production, reducing the size of manufacturing plants and the time needed to make products, and so costs, as well as the environmental impact. CEO Andrew Witty said in February that a $50 million facility GSK is building in Singapore would be the first to get to use it. He told analysts the plant would mean a "shift away from synthetic chemical reaction to enzymatic reactions," cutting processing times and the inventory that must be kept on hand while also reducing solvent use. Between a third and a half of the company's current portfolio of drugs could be made using continuous processing, Witty said. Last month, he said GSK would employ the new processing in an £85 million ($136.5 million) plant it will build in India.

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