Merck Vaccine Plant, Durham, NC, USA

Merck has constructed a new 272,000ft² vaccine production plant on a 262 acre site in Treyburn Corporate Park on the north side of Durham, North Carolina, USA. The facility, when it begins production, will produce two vaccines – one for chicken pox and the other for measles, mumps and rubella (MMR). The plant will be mechanically complete and operational by the first quarter of 2008 and following validation, the first vaccines should be available by the first quarter of 2009 (nine months ahead of schedule).

The plant is expected to eventually produce over two thirds of Merck's annual live virus vaccine stock, which could amount to over 25 million doses per year. The new facility will also manufacture Zostavax, the company's new shingles vaccine, which was approved by the Food and Drug Administration (FDA) in May 2006.

Merck saw materials and production costs jump 25% for the second quarter of 2006 and is currently (2006) engaged in major restructuring. The company sees the Durham site as an opportunity to introduce efficiencies and cut waste, in spite of the $300m it has invested in it. The facility will be expected to employ over 300 workers when it is completed.

CONSTRUCTION CONTRACTORS

The site was acquired in late 2003 and preparation began in June 2004. The project has provided high-profile work for several local contracting firms and more than 500 construction workers. The design, engineering and construction contract for the vaccine manufacturing facility was awarded to several large construction / engineering companies, including Turner Construction Company of New York, Fluor Corporation, Jacobs Engineering Group (architect and lead engineer for the manufacturing facility), Flad & Associates, Affiliated Engineers Inc, and John R McAdams Co.

CONTRACT PROGRESS

Turner was chosen to build two of the four buildings on the Merck campus,to be used for its energy centre, which will supply the facility with steam, chilled water, cooling liquid and conditioned air and also materials warehousing. These two support buildings were designed by a joint venture effort of Flad & Associates and Affiliated Engineers Inc. Flad operates an office in Raleigh, and AEI has a local office in Chapel Hill.

Fluor Corporation was involved with Merck's plans to build in Durham from day one, assisting with site selection services when the company was still looking all across the East Coast for a location for the plant. Fluor was responsible for the construction of the 166,000ft² manufacturing plant at Treyburn Park (but designed by Jacobs Engineering Inc of Pasadena).

Mass grading and site preparation work was completed by the end of 2004 allowing construction work to begin. Building permits were issued for the facility buildings by the County in late 2004. Concrete for the manufacturing building foundation was poured in late 2004. Foundation work for the two support buildings started in early 2005. The three buildings were ready on schedule for Merck to start the fitting out process for the operation in early 2006.

The John R. McAdams Co. engineering firm, based in Research Triangle Park, provided site work engineering for Merck's underground utility system for the entire 262 acres. A fourth building on the campus for administration and refectory operations is also being constructed. The contract for this was awarded in 2005, with construction scheduled to be complete in early 2007.

SUPPORT BUILDING DESIGN

The buildings consist of an 80,300ft² two-storey, good manufacturing practice (cGMP) warehouse, an 8,600ft² energy centre and 700ft of connecting utility corridor / spine. The first floor of the warehouse contains areas for cGMP and non-cGMP materials, -70° and -20° freezers, shipping and receiving areas, pallet exchange area, locker/toilets, weigh and dispense area, offices and a piping shop.

The second floor houses mechanical, electrical and instrumentation shops, computer machine room, site communication and data collection room, document and plant storage, office area, break room, and mechanical control centre room. The energy centre facility can contain chillers for water and glycol chillers, air compressors, circulation pumps, condensation tanks, air compressors/dryers and mechanical control centre/control room areas.

NEW FACILITY EQUIPMENT

The new facility has an automatic vial distribution system that can handle more than 100,000 doses of product per day in an aseptic manufacturing environment. The plant also includes a state-of-the-art lyophiliser line, where glass vials that have been filled with a mixture of sterile water, live virus and other ingredients enter the line with a rubber stopper placed on top. The vials exit sealed after two days containing a plug of freeze-dried vaccine that has to be refrigerated at -10°C.

Even though no other drug maker is moving frozen vials, Merck plans to move shelves containing up to 116,000 vials of frozen vaccine on robots that travel on a rail, so engineers have calculated they would have about 30 minutes to repair a fault during breakdown before vaccine starts to thaw. The equipment is already installed and testing has begun, with as many as 200 workers expected to be employed when the plant becomes fully operational in 2008; over a longer term there could be 600 employees.

FUNDING

The site was chosen because of the tax and economic incentives offered at State and County level to Merck and the concentration of quality scientific and technical personnel living in the Research Triangle area. The North Carolina legislature will provide $39.6m in incentives in accordance with the newly passed Job Growth and Infrastructure Act (JGIA). The incentives breakdown into: $24m from the JGIA to purchase ($10.5m) and develop ($13.5m) the site (Site Infrastructure Development Fund), a $4.7m tax rebate on construction materials and a ten-year cash grant of $3.7m.

Merck will also receive up to $4.1m in Job Development Investment Grant funds, which are awarded to new and expanding businesses and industrial projects. The incentive package also includes $1.46m in William S. Lee tax credits, $625,000 in worker training, $3m from the North Carolina Department of Transportation and $6.14m in sales tax refunds. A cost-benefit analysis indicates the Merck plant will generate $118m in gross state product annually. All of these incentives rely on a capital investment of at least $100m and the provision of at least 100 jobs on completion of the project.

MERCK’S CONFIDENCE SPARKS NEW DURHAM EXPANSION

In December 2006 Merck decided to increase its global manufacturing capacity for vaccines by making a further investment of $100m in the Durham facility, which is itself not quite complete. The expansion will further increase the company’s production capacity of MMR, chicken pox and shingles vaccine. Merck is currently the only company marketing the shingles vaccine (Zostavax), which debuted in 2006 and is expected to produce sales of more than $500m by 2009.

The new custom-designed expansion will be 115,000ft² and provide room for sterile processing, formulation equipment, lyophilisation equipment, automatic inspection equipment, testing labs, and high-speed packaging. The new phase of construction is to begin in 2007 and is expected to be completed by 2010. Durham County Commissioners approved an additional incentive of $1m in January 2007. The new expansion will create an additional 50–60 jobs by 2010.

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