Rumors that international drug giant Novartis would shut down construction of a huge $700 million vaccine plant have been so rampant lately that Town Mayor Dick Sears finally asked Novartis site executives whether the story was true.
“The answer was ‘Wow!’” Sears said Thursday in dismissing the rumor. “We were just out there yesterday afternoon and talked to the plant manager. Things are as busy as they can be. I saw 40 to 50 workers, and the work continues. I have no idea where these things get started.”
A Novartis (NYSE: NVS) spokesperson in New York, contacted by WRAL.com about the rumors, also denied a shutdown had occurred.
“Leaders from Novartis Vaccines and Diagnostics met yesterday with leaders from the town of Holly Springs,” the spokesperson said. “As part of that meeting they saw the facility under construction. Novartis Vaccines and Diagnostics also reaffirmed its strong commitment to meet all established investment and staffing objectives for the Holly Springs site.”
However, the rumor was strong enough that Sears and other town officials were concerned. Sears said he was taken aback by the talk in part because the plant is scheduled to open next year.
“They have a commitment to this,” Sears said of Novartis, which won federal contracts worth more than $200 million to produce vaccines to combat a potential influenza pandemic. “This is a real big issue with the country.”
Carl Dean, the town manager, also visited the plant Wednesday and stressed that in his view, Novartis remains committed to the project.
“We were on site yesterday and viewed a few hundred workers engaged in construction,” he said. “Novartis has never waivered from their commitment to this project as it relates to both investment and employment numbers, and we expect them to either meet or surpass what we expected when this project was announced in 2006.”
The Town of Holly Springs and the state of North Carolina also have invested heavily in the plant. The town provided the 167-acre site for the plant in an office park and also provided infrastructure support. The state and local governments as well as the Community College System are offering incentives ranging from tax breaks and payroll tax rebates to discounted worker-training programs.
Officials estimated the total economic incentive package, assembled to win a bidding war with other states for the Novartis facility, will end up being some $40 million.
According to a study that Holly Springs conducted in 2007, the plant was expected to generate an annual economic impact of $150 million in taxes and local spending.
Even as construction got under way, Novartis announced plans to expand the plant by 53 percent in size and to add between 50 and 100 jobs.
In the spring of 2006, Novartis and four other companies, including GlaxoSmithKline, were awarded more than $1 billion in contracts from the U.S. Department of Health and Human Services to help build production plants for influenza vaccines. Novartis received $220 million.
Total initial cost of the Holly Springs plant is estimated to be $267.5 million, Gov. Mike Easley said at the time the plant was announced. However, Novartis said the total investment would be as much as $700 million.
In January 2007, GlaxoSmithKline and Novartis received two additional federal contracts worth more than $118 million combined to produce an immune system booster known as an adjuvant