Two months after announcing a $1B expansion to its manufacturing facility in Elkton, Va. to support the production of Human Papillomavirus (HPV) vaccine Gardasil, the company is planning to open another manufacturing site in Durham, N.C.
Merck will build out 225,000-square-feet to support its drug manufacturing operations to produce the HPV vaccine. The new facility is expected to create 425 jobs over the course of five years. The jobs will have a minimum average salary of $73,382, which is slightly higher than the average salary in Durham County, which is $68,731, according to the Triangle Business Journal. Part of the Merck manufacturing project includes a 175,000 square-foot manufacturing space and utility center in Durham, as well as expansions to the company’s existing manufacturing facility in Wilson, which is about 90 minutes east of Durham. The average salary in Wilson County is $44,012.
Gardasil is one of Merck’s key vaccines. Merck has seen increased growth from Gardasil sales due to global appeals to eliminate cervical cancer. During an investor’s day conference last month, Merck Chief Commercial Officer Frank Clyburn said less than 3% of the world has received an HPV vaccine, which means Merck sees significant opportunities for Gardasil’s growth. HPV is the most common sexually transmitted infection. In the United States, it’s estimated that nearly 80 million people are infected with HPV. The disease can go away on its own, but it can lead to other health problems like genital warts and cancer.
Merck was looking at other states for possible expansion, including Pennsylvania and Virginia. North Carolina won out after the state sweetened the deal with $8.8M in tax incentives, including a $4.97M Job Development Investment Grant. Durham County offered $3M in incentives, and Wilson County offered $750,000, the News & Observer reported. Additional state monies could come into play as well, including incentives for community college training, the Journal said. Total incentives add up to about $12.5M.
The total manufacturing investment from Merck expected to be about $680M. Under the requirements for the tax incentives, Merck will be required to invest the full amount by the end of 2023, the Observer reported. The Journal reported that the bulk of the jobs created from the expansion will be in Durham. The Durham site will employ a minimum of 383 jobs and the Wilson expansion will allow for an additional 27 jobs, according to the report.
Another component of the grant eligibility is that the company must maintain its current headcount in North Carolina, meaning no mass layoffs. However, that does not include 50 employees who were slated to be terminated with the elimination of a service center in Charlotte. Those cuts were initially announced in 2017. At the time those cuts were announced, BioSpace reported that Merck was “discontinuing a global controllers unit.” Merck said some employees from that facility would move to other roles in the company, but 50 positions would be eliminated.