Roche investments for boosting manufacturing now exceed $1B

Roche's facilities in Basel, Switzerland--Courtesy of Roche

Roche ($RHHBY) laid out an extensive plan last year to expand and upgrade its biologics manufacturing network, spanning 5 years and three countries, including at its headquarters in Basel, Switzerland. Now the drugmaker says it has plans to add to its small-molecule drugmaking capabilities in Basel. Together the projects take the company's investments in manufacturing and logistics to well beyond $1 billion.

The Swiss drugmaker said on Monday that it will invest a total of CHF 120 million ($134.6 million) to build new facilities at its Basel headquarters as well as upgrade existing production operations there. That includes CHF 85 million ($95.4 million) for a new facility for small-molecule drugs, which it expects to have operational by Q3 2016. In addition, it said it will spend CHF 35 million ($39.3 million) to expand and upgrade an existing facility to make investigational drugs, as well as some products that are already approved. The drugmaker said that facility should be ready in June 2015. It did not indicate how many jobs might be tied to the expansions.

All of this comes on top of the more than $880 million that Roche is laying out to expand its biologics manufacturing, projects that ultimately will add about 500 jobs to its manufacturing operations. Roche is the global leader in making cancer products, and many of those are biologics, large-molecule products manufactured from living cells, like its hot-selling Kadcyla, as well as older drugs like Rituxan and Herceptin.

Roche is spending 190 million Swiss francs ($208.9 million) on a new antibody-drug conjugate (ADC) production facility in Basel that it has said will create 50 jobs. That facility will give it "additional capacity and flexibility" for Kadcyla, its first approved ADC, as well as 8 ADCs it has under development. Its new breast cancer treatments Kadcyla and Perjeta have both been fast out of the gate, adding significantly to the drugmaker's sales.

It will also spend even more on U.S. facilities, CHF 260 million ($285.9 million) to expand biologic manufacturing capacity at its facilities in Vacaville and Oceanside in California. But the biggest biologics investment, CHF 350 million ($384.9 million), is slated for beefing up its operations in Penzberg, Germany. The U.S. investments will add about 250 jobs and the German investment another 200, the company said. Roche didn't give any start or complete dates for the work but said it will boost its capacity over the next 5 years. Those investments are all aside from the $105 million the company said last year it would spend on a center to train workers for its packaging and logistics operations in Switzerland.

Last month, the drugmaker reported Q1 earnings that were up 5% year over year in constant currencies to 11.5 billion Swiss francs ($13 billion). That growth was powered in large part by two of its newer cancer drugs, Perjeta and Kadcyla for treating HER2-positive breast cancer. Perjeta, which last year became the first cancer drug approved to treat patients before surgery, has been prescribed by more than 85% of oncologists, market research firm Decision Resources said in March.

- here's the announcement