Merck to build Gardasil 9 plant and add 425 jobs, but will cut 150 elsewhere

Merck’s Gardasil is not just a moneymaker, it is a job creator. Just weeks after announcing a Virginia expansion to produce the vaccine and add 100 jobs, the drugmaker says it will build a new plant for Gardasil in North Carolina with 425 more. 

Merck’s news was not all positive, however. The drugmaker says that with the market shifting, it will stop production of the API for its varicella chickenpox vaccine in Durham and immediately lay off 150 workers. 

As for Gardasil, Merck & Co. will invest more than $680 million over five years to build a 225,000-square-foot API plant at its site in Durham, North Carolina, and expand packaging facilities in nearby Wilson. It expects to add 391 jobs in Durham when the facility is fully operational and another 34 in Wilson. The state will kick in about $5 million as an incentive. 

"Our Durham and Wilson plants are key strategic sites in the Merck global manufacturing network. And the strong support of the state is critical for the success of businesses such as ours," Sanat Chattopadhyay, president of Merck’s manufacturing division, said in a statement.  

The Gardasil 9 vaccine helps prevent nine strains of HPV, including two HPV types that cause an estimated 70% of cervical cancers, and sales have been soaring. Merck will report second-quarter earnings July 30, but in the first quarter Gardasil HPV vaccines soared 31% to $838 million.  That was driven in large part by its ongoing commercial launch in China. Worldwide sales for 2018 topped $3.15 billion, far outpacing the previous year's sales of $2.31 billion—numbers that executives called "unprecedented."

The expansion announcement comes three months after Merck said it would invest $1 billion to add 120,000 square feet to its 1.1 million-square-foot site in Elkton, Virginia, to increase production of its HPV vaccines. That project is expected to take three years and add about 100 jobs. That brings Merck's announced investments in Gardasil production this year to $1.68 billion and the job tally tied to the products to 525.

The news also comes just a few weeks after the Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices expanded its recommendation for Gardasil 9 to men and women aged 27 through 45 who aren’t adequately vaccinated. The panel had already recommended the shot for people up to age 26. The committee's recommendation should be another boost for Gardasil sales.