GE brings off-the-shelf
biotech drug factories to Ireland
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[September 19, 2016]
By Ben Hirschler
LONDON (Reuters) - General Electric is
digging deeper into biotechnology with plans to build four
prefabricated drug factories in Ireland, bringing to Europe a
low-cost manufacturing concept it first pioneered in China.
The U.S. conglomerate, better known for making jet engines and
turbines, said on Monday it would invest 150 million euros ($167 mln)
in a biopharmaceutical campus in county Cork. The new factories on
the site will be owned and run by GE customers.
The GE BioPark Cork site is expected to create 500 jobs when fully
operational, in a boost for Ireland, whose low tax rates have helped
it attract hi-tech companies - also sparking an angry row with
Brussels in the case of Apple <AAPL.O>.
Ireland has long been a major base for drug companies such as Pfizer
<PFE.N> and it has recently seen a wave of new investments by firms
making biotech medicines.
"Ireland is a real hub for biopharmaceuticals, so it's logical to do
it there," Kieran Murphy, chief executive for life sciences at GE
Healthcare, told Reuters. "It's one of the key places people are
going in the world, along with Singapore, Korea and China."
GE reckons its off-the-shelf modular factories are 25 to 50 percent
cheaper than the traditional plants needed for making complex
biological medicines. They can also be constructed in just 18 months
rather than the typical three years.
The first such GE prefab factory was built for JHL Biotech
<6540.TWO> in China, where it recently started operations. Pfizer
has also a so-called KUBio unit going up in China. Both these
factories are designed to produce cut-price biosimilars, or copies
of expensive biotech drugs.
Demand for such biosimilars is set to increase as patents expire on
top-selling injectable medicines like AbbVie's Humira for
rheumatoid arthritis and Roche's breast cancer treatment Herceptin.
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KUBio factories offer GE a way to build up its presence in biotech medicine,
which it sees as a central plank of its life sciences business. GE life sciences
sales reached $4 billion in 2015, out of total GE Healthcare revenue of $18
GE technology is already used to make leading antibody drugs and the company
also aims to become a big supplier in the emerging field of cell therapy.
GE is expected to start building the factories in Cork next year. The U.S.
conglomerate has yet to line up buyers for the units but Murphy said: "I don't
think it will take us very long to snag the first customer."
The investment is a fillip for Ireland whose low tax regime has come under
scrutiny. The Irish government is set to appeal against a 13-billion-euro back
tax demand imposed by the European Commission on technology giant Apple, fearing
it could undermine the country's long-established policy of attracting
multinationals with low taxes.
Ireland has been attracting drugmakers since the 1970s, helped more recently by
its 12.5 percent corporate tax rate. Nine of the top 10 global drug companies
today have an international base in Ireland.
($1 = 0.8965 euros)
(Editing by Susan Fenton)
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