May 23, 2025 (MarketLine via COMTEX) --
As the administration pushes for a return to US manufacturing, outsourcing agreements with domestic manufacturers are increasing.
Genentech (San Francisco, CA) has announced an investment exceeding $700m to establish its first East Coast manufacturing facility in Holly Springs, North Carolina. This expansive 700,000ftA facility is set to create over 1,500 construction jobs and more than 400 permanent manufacturing positions, marking a substantial economic boost for the region. The company shared that it might increase the investment based on future US policy and business needs. Currently, the facility is expected to support the metabolic medicines portfolio manufacture of Genentech and its parent company Roche (Basel, Switzerland).
The announcement of the manufacturing investment follows a positive Q1 2025 earnings call from Roche on 24 April 2025, where the company reported an 8% increase in sales for the pharmaceuticals division due to strong demand for key blockbusters such as Phesego, Vabysmo, Xolair, Xofluza, and Hemlibra. These five drugs generated a total of $4.3bn in Q1 2025 aEUR" an increase from Q1 2024.
The development of the North Carolina manufacturing facility aligns with RocheaEUR(TM)s plans to invest $50bn in pharmaceuticals and diagnostics in the US over the next five years, including new and expanding manufacturing facilities in Indiana, Pennsylvania, Massachusetts, and California, as shared in RocheaEUR(TM)s Q1 2025 earnings call.
GenentechaEUR(TM)s latest manufacturing expansion is one among the many investments into US-based manufacturing operations to counter international tariffs, national security concerns, rising tensions with China, and other executive orders enacted during the first 100 days of TrumpaEUR(TM)s second term that impact the pharmaceutical industry. Although the total number of Q1 contract service agreements has decreased year-on-year in the past five years, there has been a 10% increase in the number of US-based contract service agreements in Q1 2025 compared to Q1 2024, according to GlobalDataaEUR(TM)s Deals Database (Figure 1).
Figure 1: US versus global contract service agreements, Q1 2021 aEUR" Q1 2025
Source: GlobalData Pharmaceutical Intelligence Center, Deals Database (Accessed 13 May 2025).However, the Trump administrationaEUR(TM)s executive order "Delivering Most-Favored-Nation Prescription Drug Pricing to American PatientsaEUR, announced on 12 May 2025, prompted Roche to state that its $50bn manufacturing investment could be aEURoereassessedaEUR due to potential fluctuations in the aEURoecurrent policy environmentaEUR. The executive order, which aims to lower US drug prices by aligning them to the lowest prices paid in other developed nations, has created debate among pharmaceutical companies and stakeholders. Stephen Ubl, PhRMA president, argues that the "most-favored-nation plan" will aEURoe[jeopardise] the hundreds of billions [their] member companies are planning to invest in AmericaaEUR.
During the Financial TimesaEUR(TM) US Pharma and Biotech Summit, Calley Means, a key member of HHS Secretary Robert F Kennedy, JraEUR(TM)s team, challenged Roche to retract their investment following the companyaEUR(TM)s response to the aEURoemost-favored-nation planaEUR. However, Roche reaffirmed that they are not pulling their investment.
"[The company] still intend[s] to invest $50bn in pharmaceutical R&D and manufacturing and diagnostics in the US," the Roche representative shared.
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COMTEX_465734563/2227/2025-05-23T18:22:15
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