US biotech giant Amgen delays building of planned East Cork plant by 2 years; Firm's market value slid by $14.5bn to $$65.2bn in Q1 2007

Irish
US biotech giant Amgen delays building of planned East Cork plant by 2 years; Firm's market value slid by $14.5bn to $$65.2bn in Q1 2007
By Finfacts Team
Apr 3, 2007, 06:53

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Originally founded in 1980 as AMGen (Applied Molecular Genetics), Amgen pioneered the development of novel and innovative products based on advances in recombinant DNA and molecular biology. More than a decade ago, Amgen introduced two of the first biologically derived human therapeutics, EPOGEN® (Epoetin alfa) and NEUPOGEN® (Filgrastim), which became the biotechnology industry's first blockbusters. These products have improved the lives of hundreds of thousands of patients suffering from conditions related to chronic kidney disease and cancer.

US biotechnology giant Amgen has announced that it has delayed by two years plans to build an €820 million manufacturing plant in East Cork, a move that will delay the recruitment of more than 1,000 staff until 2012.

While Amgen confirmed that the project will go ahead, the development is a blow to efforts to provide alternative employment in the Cork region, which in recent months has been hit by job loss announcements at big multinational firms such as Motorola and Pfizer.

On Tuesday, it was reported that the US biotech industry's collective market cap dropped 4% by the end of March to $470 billion. Amgen was a prime factor in the dip as it shed $14.5 billion off its market cap to close the quarter at $65.2 billion well behind Genentech, which closed at $86.5 billion.

The Burrill Biotech Select Index had a rocky month of March losing 0.3% in value but outperformed the general markets by a wide margin closing up 4.3% for the first quarter of 2007. "Biotech's quarter performance was quite impressive given the general markets turmoil in February with a 416-point dip and subsequent rebound in the Dow and renewed fears about the economy in the wake of the US imposing duties on some Chinese imports," said G. Steven Burrill, CEO, Burrill & Company, a San Francisco based global leader in life sciences whose principal activities are in Venture Capital, Merchant Banking and Media. "However, biotech didn't survive the quarter completely unscathed. Amgen's shares were hit hard on disappointing news surrounding its colon cancer drug Vectibix and its blockbuster anemia drug Aranesp," added Burrill.

The announced delay of the Amgen Cork project comes less than 15 months after IDA Ireland succeeded against intense competition from Switzerland and Singapore to secure the investment from the world's biggest biotechnology firm.

Minister for Enterprise, Trade and Employment Micheál Martin TD had announced on January 24, 2006 that Amgen planned to build process development, bulk manufacturing and fill and finish facilities at Carrigtwohill, Co. Cork. It would invest more than $1 billion (€0.82 billion) in the projects and employ more than 1,100 people in Cork by 2010.

Martin said in January 2006: “This is a landmark decision and one which is welcomed not just by Cork but by all of Ireland. Investments of this scale speak volumes about Ireland’s ability to compete and win the most advanced and innovative business from the biggest biotechnology company in the world.

The intense global competition for these investments has been well publicised and we are delighted to be officially bringing this superb news today to the people of Cork and Ireland. The Irish Government, IDA Ireland and local partners made a concentrated group effort to win these projects and Amgen, a leader in its field, with world-class R&D and groundbreaking discoveries, is a very welcome addition to our thriving biotechnology industry. ”

The Minister went on to say; “These investments further validate the decisions by the Government over recent years to invest in the development of Ireland’s support infrastructure for the Biotechnology industry. The investment, through Science Foundation Ireland, in biotechnology research in our universities and the more recent decision to establish the National Institute of Bioprocessing Research and Training are initiatives which have improved our competitiveness and will provide substantive support to Amgen as it grows and develops its business here in Ireland”.

Amgen had plans to employ 750 graduates by 2010, among them 120 with doctorates or Master's degrees.

On Monday, Amgen said that it had decided to "reschedule" execution of the project. While it planned to initially employ up to 1,100 people, it had also held out the possibility of significant expansion in the Irish unit, noting that the plant would ultimately have the potential to employ 2,500 people.

An Amgen spokeswoman said yesterday that the plant would not go into production until 2012. She attributed the delay to a "global reassessment of business needs" but did not provide any further details about the reasons for the decision.

"The company is fully committed to going ahead. It's just a time change," she said.

Saying that the original schedule was "too aggressive", she said the new plant in Co Cork was no longer required "at the same pace" as envisaged last year.

Amgen continued to invest €75-€100 million in site preparations for the development at its 133-acre property in Carrigtwohill, she said. "This change is going to allow them to sequence it [ the development] in a more standardised manner."