Merck (NYSE: MRK), a leading global biopharmaceutical company, will invest more than $650 million and create more than 400 jobs in North Carolina, building a new production facility at its Maurice R. Hilleman Center for Vaccine Manufacturing in Durham and expanding its packaging operations in Wilson. This substantial project will enable Merck to meet growing demand for GARDASIL and GARDASIL 9 recombinant human papillomavirus (HPV) vaccine, which is used to prevent several cancers associated with HPV.
“The life science industry cluster in North Carolina enjoys a well-earned reputation as one of the nation’s leading centers for biotech innovation,” said North Carolina Commerce Secretary Anthony M. Copeland. “Merck’s long experience in our state gave them the confidence to bring this important new operation to North Carolina.”
Merck, with headquarters in Kenilworth, New Jersey and known as MSD outside of the United States and Canada, discovers and develops medicines and vaccines for many of the world’s most challenging diseases. The company operates in more than 140 countries and stays at the forefront of research to advance the prevention and treatment of diseases that threaten people and communities around the world.
The company’s GARDASIL 9 vaccine helps prevent nine strains of HPV, including two HPV types that cause an estimated 70% of cervical cancers. Merck’s project to expand its North Carolina facilities includes plans to design, build, and win qualification from the FDA for a new 225,000 square foot manufacturing facility to produce active ingredient for the vaccine. The new facility will be located at Merck’s current manufacturing center in Durham.
“Merck is delighted to bring additional investment and jobs to North Carolina,” said Sanat Chattopadhyay, Executive Vice President, Merck, and President, Merck Manufacturing Division. “Our Durham and Wilson plants are key strategic sites in the Merck global manufacturing network. And the strong support of the state is critical for the success of businesses such as ours.”
The North Carolina Department of Commerce and the Economic Development Partnership of N.C. (EDPNC) led the state’s support for the company’s decision.
Although wages will vary depending on position, the average salary for all the new positions will reach $73,382. The current average wage in Durham County is $68,731 and it’s $44,012 in Wilson County.
Merck’s project in North Carolina will be facilitated, in part, by a Job Development Investment Grant (JDIG) approved by the state’s Economic Investment Committee earlier today. Over the course of the 12-year term of this grant, the project is estimated to grow the state’s economy by $3.1 billion. Merck will invest up to $650 million in the Durham location and create 391 jobs there. In Wilson County, the company will invest up to $30 million to expand its existing packaging operations, creating 34 jobs. Using a formula that takes into account the new tax revenues generated by the new jobs, the JDIG agreement authorizes the potential reimbursement to the company of up to $4,974,750, spread over 12 years. State payments only occur following performance verification by the departments of Commerce and Revenue that the company has met its incremental job creation and investment targets. JDIG projects result in positive net tax revenue to the state treasury, even after taking into consideration the grant’s reimbursement payments to a given company.
As with many of the state’s incentive packages, the company’s JDIG agreement includes a requirement to retain a certain number of positions in the state in order to qualify for grant payments for the new jobs announced today. Merck’s manufacturing operations in North Carolina currently support 1,234 positions, which will serve as the company’s retention requirement. The company’s transformation at its Durham site includes the end of bulk production for its drug product varicella, due to changes in market demand. As a result, Merck will eliminate the positions of up to 150 current full-time employees at the plant. Most of the job reductions will be immediate. However, these positions are included in Merck’s retention target, which means the company must return to current staffing levels before adding the 425 jobs being announced today.
Because one of the sites Merck chose is in Durham County, classified by the state’s economic tier system as Tier 3, the company’s JDIG agreement also calls for moving as much as $1,515,250 into the state’s Industrial Development Fund – Utility Account. The Utility Account helps rural communities finance necessary infrastructure upgrades to attract future business. Even when new jobs are created in a Tier 3 county such as Durham, the new tax revenue generated through JDIG grants helps more economically challenged communities elsewhere in the state. More information on the state’s economic tier designations is available here.
Partnering with N.C. Commerce and the EDPNC on this project were the North Carolina General Assembly, the North Carolina Department of Transportation, the North Carolina Community College System, the North Carolina Biotechnology Center, Duke Energy, Durham County, Wilson County, the City of Durham, Wilson County’s Economic Development Office, and the Greater Durham Chamber of Commerce.