Novartis will build a $36 million research lab and create 100 new high-paying jobs in Holly Springs, where it opened a large vaccine plant last year.
The expansion puts Holly Springs at the forefront of the Swiss drugmaker's efforts to develop vaccines to replace drugs that will soon lose their patent protection.
The new facility will include a small plant where vaccines can be tested before being manufactured on a large scale. The jobs will pay average wages of $106,200.
"I think it portends all kinds of future possibilities," Holly Springs Mayor Dick Sears said. "The big thing is the jobs they're announcing."
Novartis opened a $600 million vaccine plant in Holly Springs last year. That facility, which will eventually employ about 350 people, is expected to begin commercial vaccine production in 2013.
For its latest expansion, Novartis was awarded state and local incentives worth as much as $4.7 million if it meets hiring and investment goals. That's on top of more than $40 million in potential incentives the company was given to open the vaccine plant.
Novartis' Holly Springs operations are part of a larger shift occurring within the pharmaceutical industry.
About 30 percent of the industry's revenues, roughly $75 billion, are tied to drugs that are set to lose patent protection by 2012, said Richard Kouri, director of BioSciences Management Initiative at N.C. State University's College of Management.
Kouri said the industry's failure to develop new drugs is forcing drugmakers to focus more on developing new vaccines.
"They're all moving in this direction," he said.
Room to grow
The Triangle is quickly establishing itself as a center for vaccine production.
Merck is preparing to make vaccines at its facility in North Durham, and Pfizer gained a vaccine factory in Sanford when it bought Wyeth.
Novartis also considered building its research lab and pilot plant in the Tuscany region of Italy.
The company noted that Holly Springs provides it with access to a large pool of talented employees and proximity to high-level research universities.
A Novartis spokeswoman said Wednesday that it would be premature to say whether the placement of the research lab in Holly Springs will lead to additional manufacturing plants on the site.
The company has room to expand. To lure Novartis to town, Holly Springs borrowed $8.3 million to buy the company 167 acres of land and spent $12 million on road improvements and other infrastructure upgrades.
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