News

Posted On: 07/20/2004

North American Capital Spending for Pharma Exceeds $4 Billion, Research Finds

As the summer of 2004 gets underway, the pharmaceutical-biotech sector continues to be hot with strong capital project spending activity, albeit with some shifting around and changes. Industrialinfo.com recently performed a project update of those North American capital and maintenance projects that were originally planned to kick-off construction in June of 2004, with a total value over $4 billion. Of the 57 projects surveyed, 18 adhered to schedule and began construction this month; 26 had their kick-off dates moved out; six were put on hold and eight were cancelled for various reasons.

By continuously monitoring and reverifying project spending plans of North American pharmaceutical-biotech industry plant owners, and measuring the percentage change in project fallout, otherwise known as Gap Measurement, Industrialinfo.com presents an up-to-date accounting of the capital spending underway during the month of June.

The 18 projects that launched construction in June represent a total investment value of over $700 million. They range from the National Institutes of Health's (NIH) monolithic and often controversial $186 million Biodefense Laboratory 33 in Bethesda, Maryland, to $2 million for routine maintenance work at the AstraZeneca (London, England) plant in Mississauga, Ontario.

Pharmaceutical-Biotech construction activity at the university level remains intense, with nearly $300 million worth of research laboratory projects beginning this month at schools in Ohio and Alberta. Novartis continues its spending spree in New England, with another $200 million being spent to beef up biomedical research capacity.

A diverse group of projects make up the 26 projects valued at $1.7 billion that had their kick-off dates moved out. Reasons for the delays varied, with some held up due to stringent permitting processes, as was the case of the long anticipated $150 million Blackfan Biomedical Research building by Lyme in Cambridge, Massachusetts, finally expected to start construction next month. Boston University is still inching through the approval process and facing very vocal public opponents before beginning its $180 million biocontainment laboratory. Pfizer has two projects, manufacturing and research capacity expansions representing $140 million that were moved out, but are expected to proceed once final site decisions are made.

The remaining fourteen projects, worth $729 million were with cancelled or put on hold. Many of those put on hold, like the DESCO Group’s plan to build a $50 million research laboratory at the site of a former automotive plant in Saint Louis, Missouri, will most likely be built, but outside of Industrialinfo.com's typical two-year reporting range. DESCO has several projects underway in Saint Louis and merely decided to postpone this one, to avoid over building capacity. Some of the cancelled projects were, indeed, just cancelled, never to be built, while others, like the $15 million GlobeImmune Incorporated (Aurora, Colorado) project, moved into an existing facility that was retrofitted for them, rather than building new.

For more information on the projects mentioned in the above survey contact Industrialinfo.com's Member Center at 1-800-762-3361.

 Industrialinfo.com (IIR) is the leading provider of global industrial market research. We specialize in helping companies develop information solutions to maximize their sales and marketing efforts. For more information, send inquiries to pharmabiogroup@industrialinfo.com or visit us at www.industrialinfo.com.