UPDATED: Merck sells Colorado biologics plant to KBI

Merck ($MRK) has closed or sold a number of manufacturing operations as part of its most recent restructuring, an effort to hack $2.5 billion in expenses from its operating costs. The drugmaker has now added to its list a biologics plant in Boulder which 5 years ago it picked up for $130 million.

KBI Biopharma, which is based in Research Triangle Park, NC, said this week that it closed the deal to buy the plant at the first of the month. The contract manufacturer will maintain some drug development and manufacturing of Merck products from the facility, as well as doing work for Merck at its facilities in North Carolina. But KBI will also use the Boulder facility to do projects for other clients, allowing it to provide microbial development and manufacturing up to a scale of 1500L.

Lainie Keller, director of global communications at Merck, said the 30 employees of the plant were taken on by KBI. She said that the facility has been providing analytical and technical support for Merck's biologics pipeline and produces Recombinant Trypsin (R-Trypsin), which is used in the manufacture of vaccines and other biologics.

KBI has plans to build production at the facility and last month was granted $1.4 million in state incentives in exchange for bringing 120 jobs to Boulder, according to the Boulder County Business Report.

KBI CEO Joe McMahon

"We are very pleased to continue to advance our partnership with Merck, and to welcome this very highly regarded team of scientists in Boulder to the KBI team," KBI CEO Joe McMahon said in a statement.

Terms of the deal were not disclosed but Merck bought the Boulder plant in 2009 from Ismed for $130 million. Now, with revenues facing patent cliff issues, Merck is shedding assets. It sold its Merck BioManufacturing Network and its biologics plants in North Carolina and Northeast England in 2011 to Japan's Fujifilm, which was looking for a way to get into biologics manufacturing. Fujifilm paid $490 million for the operation. Last year Merck sold off some active pharmaceutical ingredient operations in the Netherlands and U.S. to Aspen Pharma in a $1 billion, multi-layered deal that also included Aspen buying 11 products from Merck.

- here's the announcement
- more from the Boulder County Business Report