Amgen designed a biologics manufacturing plant several years ago that was smaller, cheaper and more flexible than the traditional giant-sized, drug-specific model. Then it built it in low-cost Singapore. Now, motivated by U.S. tax breaks, Amgen will invest up to $300 million to build a plant in the U.S. and hire hundreds of workers.
The Thousand Oaks, California-based company said it expects to name a site for the new facility in the second quarter and build a facility that will employ about 300 people when it is complete. The big biotech didn’t say when the project might start or be completed, but it took less than 18 months to build its facility in Singapore.
Amgen CEO Bob Bradway announced his company’s plans while reporting earnings last week that missed analysts' expectations.
“The timing of tax reform is particularly relevant for us right now as we are on the cusp of deploying our so-called next-generation bio-manufacturing technologies, which enable us to make biologics with much improved productivity, a smaller footprint and much reduced levels of waste and environmental impact,” Bradway said on a call with analysts.
Amgen started on the path to the new plant some years back when Amgen executives became frustrated with conventional biologics manufacturing of cell-based drugs because it was slow, inflexible and very expensive. They pointed out that plants and accompanying infrastructure would often take up more space than a dozen football fields, take years to build and often were dedicated to a single product. Changing products would later require expensive retrofitting.
Looking for a better way, Amgen scientists tested new technology using modular 2,000-liter vessels that are portable and accommodate single-use bioreactor bags, but when lined up can produce as much protein as the massive conventional tanks.
Such a plant's smaller size and new design would allow it to be constructed in about 18 months, not four or five years. However, when Amgen decided to bring what it calls its "visionary" plant to fruition, it built the new technology facility in lower cost Singapore.
Now, with the corporate tax cut, Amgen said the economics work to erect a plant in the U.S. While cost details have yet to be released, the company said it will invest up to $300 million and hire up to 300 workers for the new facility.
“We expect to complete this expansion in about half the time of a conventional plant for approximately one-third of the cost,” CFO David Meline told analysts last week.
The move to the cheaper, leaner plants is also part of Amgen’s effort to cut costs by reducing the size of its manufacturing footprint. That is part of the $1.5 billion in annual cost reductions it has made since about 2014, when it began reducing its headcount by about 20%.
Meline said that with Amgen’s new plant in Singapore, along with other efforts, “we are on track to meet our 2018 goal of reducing our facility footprint by 23%.”