Amgen: Tax reforms stoke $300m investment in next-gen US biomanufacturing plant

By Dan Stanton contact

- Last updated on GMT

GettyImages: cbies
GettyImages: cbies
Amgen has announced plans for a US biomanufacturing facility, similar to its flexible and single-use Singapore plant, as part of $3.5bn freed through tax reforms.

Amgen’s newest biomanufacturing facility began commercial production last year. Commissioned in 2014,​​ the $200m 120,000 sq ft facility, located in Singapore, was constructed based on Amgen’s so-called next-generation biomanufacturing platforms and consists of disposable technologies, a modular lay-out and real-time remote monitoring.

The firm has said​ the site incorporates all the areas of a conventional 750,000 sq ft facility but was built in half the time, at a quarter of the capital cost, and has a third of the operating expense.

And now Amgen is planning to replicate such a facility in the US, thanks to the ‘Tax Cuts and Jobs Act,’ signed into law in December.

“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 biomanufacturing technologies, which enable us to make biologics with much improved productivity, a smaller footprint and much reduced levels of waste and environmental impact,”​ CEO Bob Bradway said during a financial call yesterday.

“We developed these technologies in the US and thanks to tax reform, we will now build new manufacturing capacity and add highly skilled jobs here in the US to capitalise on them.”

As well as slashing corporation tax from a top level of 35% to 21%, the Act makes it affordable for US firms to repatriate cash held overseas. Bradway told stakeholders he expects to invest around $3.5bn in capital expenditures in the US over the next five years on the back of these reforms.

$300m plant, location unknown

CFO David Meline added a key component to Amgen’s US CAPEX plans included “a new drug substance manufacturing plant which will be built using our next-generation biomanufacturing capability.”

The plant – the location of which has not been divulged – will cost around $300m and is expected to lead to 300 new skilled jobs.

Amgen has been undergoing a reduction in its general manufacturing network since July 2014​. Meline said investing in “next-generation biomanufacturing capability as well as other efforts to optimise fixed capital infrastructure,”​ keeps Amgen on track to meet its 2018 goal of reducing its facility footprint by 23%.

Bradway added a shift from traditional biomanufacturing facilities and their associated high fixed and operating costs will give Amgen the competitive advantage, especially in the biosimilar space:

“We still believe that manufacturing is a source of competitive advantage at Amgen. We have a track record of supplying every patient every time and we think when it comes in particular to biosimilars, the reliability of the safe supply and reliable supply of biosimilar medicines from Amgen will be a differentiator.”

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