British drugmaker AstraZeneca is doubling down on Maryland, spending $200 million to expand its Frederick manufacturing facility a year after shifting hundreds of out-of-state jobs to Montgomery County.
Company officials said Friday that they are adding 40,000 square feet and 300 jobs at the facility to increase production capacity of drugs made from human or animal material, or microorganisms. MedImmune, the Gaithersburg-based biopharmaceutical company AstraZeneca bought for $15.6 billion in 2007, accounts for half of AstraZeneca's drug pipeline.
Officials in Frederick and with the state's economic development agency welcomed the expansion, which comes as AstraZeneca has scaled back and consolidated its presence elsewhere in the United States and United Kingdom. They had feared losing the drugmaker in a takeover by Pfizer Inc., but that effort failed.
"It really strengthens the ecosystem and fortifies the workforce," said Judy Britz, executive director of the BioMaryland Center, a division of the state's economic development department. "[Biotechnology] clusters grow in part because they establish a certain critical mass."
AstraZeneca plans to begin the expansion in December and complete it in mid-2017. The company employs 3,100 people in Maryland.
The expansion will include new manufacturing, laboratory and administrative space in the facility, which is licensed by the Food and Drug Administration.
Since 1999, MedImmune has used the facility to make Synagis, a drug that treats a lung disease called respiratory syncytial virus. The company has recently expanded it to manufacture other types of monoclonal antibodies, lab-made proteins that can bind to substances in the body, such as cancer cells.
AstraZeneca officials said the expansion announced Friday "will help position the company to keep pace with a growing demand for the development and use of biologics," a category of medicines that includes vaccines and therapeutic genes, tissues and cells.
That portion of the company's portfolio falls on MedImmune, which was founded in 1988 and grew to become the state's marquee biotechnology success story. Drugs in its pipeline that are in late-stage clinical trials include treatments for mesothelioma, leukemia, lung cancer and severe asthma. Its two products sold commercially are Synagis and FluMist, a nasal spray influenza vaccine it acquired in 2002.
State and local officials were in talks with AstraZeneca for the past year about the expansion, said Karen Glenn Hood, a spokeswoman for the state Department of Business and Economic Development. The department expects to provide AstraZeneca a $1.5 million loan for the project, likely forgiving it if the company meets benchmarks for capital expenditures and job growth and retention.
The State Highway Administration and officials with Frederick County and the city of Frederick also agreed to make improvements to roads leading into the facility. Frederick Mayor Randy McClement said officials were eager to help.
"We've always tried to find corporations that can come here and help pay a wage that would keep people from having to drive down [Interstate] 270" for jobs, McClement said.
Earlier this year, the company's presence in Frederick appeared more tenuous. After Pfizer declared plans to buy AstraZeneca in April, Gov. Martin O'Malley and members of the state's congressional delegation wrote to Pfizer officials urging them to maintain investment in Maryland, fearing the local labs would disappear like others owned by the New York-based pharmaceutical giant.
Pfizer made a $118 billion hostile takeover bid, but after being rejected by AstraZeneca's board, walked away from the deal a month later. Under British takeover rules, it can make another attempt starting late this month.
Meanwhile, AstraZeneca has been boosting its presence in Maryland. It shifted 300 jobs from outside the state to Gaithersburg last year as it consolidated and cut 1,600 jobs in the United States, United Kingdom and Sweden.
The more the company invests in the facility, the better for Maryland, as manufacturing is a significant asset for pharmaceutical companies that is difficult to uproot, Britz said.
"It tends to be a very sticky commodity," she said.