WILMINGTON – The Delaware state investment board has unanimously approved a $30.2 million taxpayer-funded grant to Merck & Company Monday, signaling that the pharmaceutical giant may be building a $900 million facility at the Chestnut Run Innovation and Science Park (CRISP).
Merck representatives have invested a year in designing a new manufacturing facility that would be 450,000 square feet across multiple buildings, laboratories, warehouses and other operations. Sources tell the Delaware Business Times that the investment could be more than $1 billion, considering construction costs.
The grant made to one of the top pharmaceutical manufacturers in the United States, is the largest grant approval made during the past eight years, totaling $11 million more for the grant awarded to STA Pharmaceutical for its massive pharmaceutical campus that is close to completion in Middletown. It is the largest grant approved by the state since Bloom Energy was granted $16.5 million to move to Newark in 2011.
However, the grant — which is reimbursed after the company makes the investment — is one factor in the final stages of Merck’s search for a location to build a plant that would be fully operational by 2030.
Merck representatives told state officials at Monday’s Council on Development Finance (CDF) that CRISP was one of a few possible locations, but non-disclosure agreements prevented them from elaborating further on the First State’s competition.
“We are in the final stages of decision making. This has been a competitive process, and [we] started with no limitations around the globe,” Merck Executive Director of Manufacturing Network Strategy Timothy Keppel told the CDF on Monday. “Where is the best place for this state-of-the-art manufacturing facility? And that has led us to this final stage.”
Merck was awarded $4.7 million in job performance grants and a capital expenditure grant up to $25 million to lease a multi-building complex at the CRISP site off Route 141. State documents show that Merck plans to manufacture “drug substance and drug products” for products under development.
If Delaware was selected for the next Merck site, a 20-year lease would be signed for CRISP, as the MRA Group would start construction on the shell of the building this year, according to Keppel. Merck would then build out the production area with specialized equipment.
Kurt Foreman, the CEO of the Delaware Prosperity Partnership, stressed that life science companies like Merck was targeted as one of the key sectors the state wanted to focus its economic development efforts on in the past eight years. He also noted that strong collaborations with the University of Delaware, Delaware State University, the Delaware Biotechnology Institute, Delaware Bioscience Association and NIIMBL have been working to address the next generation of researchers to help make the state a life sciences hub.
“This collaboration has inspired continued investments in the sector from companies like Incyte, AstraZeneca, Adesis, Prelude Therapeutics and others,” Foreman said. “This is a competitive project and it could be a game changer for Delaware …. The company would offer career opportunities to Delaware and contribute heavily to the state and county tax base.”
The project, which is codenamed “Project Fast Pitch” in state documents reviewed by the Delaware Business Times through a Freedom of Information Act Request, would be a transformative one for the state. If Merck does sign on with CRISP and its developer MRA Group, it would bring 375 jobs in laboratory technology, facility engineering, manufacturing and warehouse positions. All jobs would have “family sustaining salaries and benefits.”
Hiring would begin when Merck starts construction on its new facility, if the pharmaceutical giant chooses Delaware.
“That’s what’s so exciting about the project and why we looked at site locations that had access to talent, especially in biologics,” Keppel said. “That’s one of the reasons we have been so focused on Delaware and its growing biologics talent pool, and it’s one of the talent pools that we think we could also enhance if we were to select Delaware.”
Michael Fleming of the Delaware Bioscience Association told DBT that the news of CRISP making it to the final round of selection for Merck was exciting, but also a validation of Delaware’s strong life science sector. Delaware has been on the map for pharmaceuticals since DuPont’s own storied investment in the sector and AstraZeneca opened a major plant in northern Delaware decades ago.
In fact, DuPont and Merck formed a $230 million joint venture in 1990, which included 1,500 drug researchers to discover and develop drugs and market existing ones like anti-clotting agent Coumadin and painkillers Percodan and Percocet. That deal came after two decades after DuPont tried on its own to build a pharmaceutical company internally or through acquisitions, reported the Washington Post. It ended in 1998 when DuPont offered $2.6 billion for the division – and later sold it to Bristol Myers Squibb three years later for close to three times that price.
Fleming said he believes that Merck would put Delaware and CRISP on the map as the state continues to compete regionally and nationally for such projects.
“This facility would be a tremendous boost for and the validation of the growth and momentum of our dynamic life science industry. CRISP is an ideal location for this investment, which will provide scores of construction jobs and ultimately immense opportunities for great careers in advanced manufacturing, most of which do not require a college degree,” Fleming said in a text message to DBT.
Merck is a global health care company that uses cutting-edge science to develop vaccines, pharmaceuticals, biologic therapies as well as animal health products. Over the years, it has delivered several blockbuster medicines like cancer immunotherapies Keytruda and HPV vaccine Gardasil. In 2024, the company reported $64.2 billion in sales, including $29.5 billion from Keytruda.
The pharmaceutical company is headquartered in Rahway, N.J. and has research and development facilities in Boston and Cambridge Mass., San Diego and San Francisco, Cali., West Point. And Upper Gwynedd, Pa., as well as in London, Singapore and Ireland.
Keppel told the CDF that Merck has a “very strong development pipeline in place” and his job includes looking closely at the needs for its manufacturing division and needs five to 10 years down the line.
“We look at where there’s gaps and where we don’t have enough capacity, and this biologic pipeline was identified as that exact case,” he said. “So we need to solve as we have a broad team that looks at [solutions] in that gap in manufacturing. That can be by partnering with external manufacturers to manufacture products for us, or to expand our own internal manufacturing network or to build a new site.”
Merck does have one Delaware facility to date: the Merck Animal Health facility in Millsboro where 300 people work. The company is also one of the largest poultry vaccine manufacturers in the world with products focusing on diseases affecting broiler chickens.
CRISP developers, the MRA Group, have declined to comment to the Delaware Business Times on Merck’s possible plan to build in Delaware. But the grant announcement could signal a major win for the developers, which bought a large portion its Chestnut Run headquarters campus off Route 141. The deal in 2021 included 780,000 square feet in about 13 laboratories for $40 million.
In the four years since, the MRA Group has signed Prelude Therapeutics and Solenis to
the campus as well as a day care provider and Marriott Residence Inn. Demolition is currently underway on the site, although MRA Group representatives declined to comment on that process at the groundbreaking ceremony for the Residence Inn earlier this month.
Merck representatives confirmed during the CDF meeting that its potential facility would be between the hotel and the Prelude Therapeutics headquarters.
Keppel said that while the general contractor may not be a Delaware firm, it is Merck’s expectation to hire Delaware contractors and labor, so long as it meets the competitive requirements for the project.
According to documents included in Merck’s application for the strategic grant fund, Merck plans to spend $330 million in building its facilities, and millions more on engineering and architectural fees as well as utility costs. Merck also plans to spend $290 million on new equipment.
Members of CDF asked questions on the construction, the possible use of a union workforce, as well as the timing of the project. Sen. Nicole Poore (D-New Castle/Bear) pressed Keppel about where Merck stands on its site selection process, as well as the timeline. While Keppel did not answer about other possible locations, he did say there were other factors “that had to be resolved” before a final decision was made.
“That can happen in a week, it can happen in a month. If there are delays in that, it’s because something comes up that is beyond our control and we have to deal with that,” Keppel said. “I can tell you; it’s time sensitive for work to begin construction on this facility. We have a set use for it in 2030, and if we are not online, we’re not giving products to patients. It’s critically important that we get this started as soon as possible.”
The state senator told Keppel and other Merck representatives that she was confident that “Delaware is going to be the place you would want to call home and should call home.”
“I think the things that we do in Delaware to incentivize companies to come to Delaware are pretty significant, which is why you’re sitting before us today. But being realistic, we also want to make sure that the people in Delaware are the ones working and providing the services you need. We do have some of the most outstanding programs [at UD, DSU and Del Tech] so we would certainly fit the market for that,” she said.
“I’m sure this will be an easy decision for you,” Poore added.
This story has been updated.
