Dive Brief:
- Healthcare company Fresenius Kabi AG plans to build a new manufacturing facility and expand an existing production site in Wilson, North Carolina, continuing a U.S. expansion recently boosted by its $4.3 billion acquisition of generics maker Akorn Inc.
- Fresenius says the $100 million expansion, which was supported by a North Carolina Job Development Investment Grant, will create hundreds of new jobs on top of the 100 staff it currently employs in Wilson.
- Last year, Fresenius Kabi invested $250 million in its Melrose Park, Illinois manufacturing plant for the production of sterile injectable pharmaceuticals.
Dive Insight:
Generics companies have consolidated to improve cost-effectiveness as the demand for low-cost pharmaceuticals increases, and competition builds. Fresenius Kabi followed this trend when it acquired the generics company Akorn this past spring. The German company also bought Merck KGaA's biosimilars business at the same time, further planting its flag in the copycat drug business.
Now Fresenius, which specializes in medicines and technologies for infusion, transfusion and clinical nutrition, is building up its manufacturing capabilities to meet the need, as well as expand its relevance in the U.S.
The North Carolina state government supported the expansion, handing Fresenius a Job Development Investment Grant (JDIG), which was approved by the state's Economic Investment Committee. Under the terms of the grant, Fresenius Kabi has committed to creating 445 jobs over five years. Once it has succeeded, it will receive a potential reimbursement of up to $7.2 million, spread over 12 years.
Fresenius' manufacturing expansion isn't just limited to the U.S. The company also opened a new plant in Cikarang, Indonesia, through PT ETHICA Industri Farmasi, a joint venture of Fresenius Kabi and the Indonesian pharmaceuticals company SOHO Global Health. This will employ 230 people and manufacture injectable drugs for Indonesia and other Southeast Asian countries.