MIDDLETOWN – A Delaware state investment board unanimously signed off on a $19 million taxpayer-funded grant to a Chinese pharmaceutical company Monday, clearing the way for a massive campus development in Middletown.
The grant, made to STA Pharmaceutical USA, a subsidiary of Shanghai-based WuXi AppTec, is the largest grant approval made during Gov. John Carney’s term, totaling nearly four times that given to Amazon for its massive Boxwood Road fulfillment center last year. It is the largest grant approved by the state since Bloom Energy was given $16.5 million to locate in Newark in 2011.
STA was granted $3.25 million in a job performance grant to hire 479 people by 2026, a capital expenditure grant of up to $15.3 million to aid in the facility’s construction cost, and a training grant of up to $500,000 to help prepare workforce for the jobs that would be at the manufacturing plant.
“Project Dragonfly is highly competitive project with coveted manufacturing jobs and significant capital investment,” said Kurt Foreman, president and CEO of the Delaware Prosperity Partnership, the state’s economic development agency, in presenting the proposal Monday morning, using the project’s assigned pre-approval codename.
At the Council on Development Finance hearing, STA’s grant application was supported by the Delaware Bioscience Association, Delaware State Chamber of Commerce and Delaware Contractors Association, along with the town of Middletown, whose mayor, Ken Branner, called the project “a once-in-a-lifetime opportunity.” The lone opposition voice came from a state Libertarian Party leader who argued that the sheer size of the grant to a foreign, billion-dollar company was better spent on local small businesses instead. State officials reported that even with the large allocation to STA, however, the state’s Strategic Fund for grant investments in projects would have about $20 million remaining.
STA, led by CEO Minzhang Chen, a former executive of Boston-based Vertex Pharmaceuticals, is a small molecule development and manufacturing firm. Chen has led the company from a research firm to a contract development and manufacturing organization (CDMO), which aids the in the development and manufacturing of drugs for contracted clients. It already works with industry leaders like AstraZeneca, Pfizer, Johnson & Johnson, GlaxoSmithKline, Sanofi, Abbvie and Lilly, among dozens of others.
“WuXi STA is excited to join Delaware’s growing healthcare community and establish Middletown as the home of our new state-of-the-art pharmaceutical clinical and commercial manufacturing complex,” Chen said in a statement released after the approval. “Delaware’s highly trained pharmaceutical manufacturing workforce and proximity to many of our customers provide tremendous opportunities to support the region’s economic growth and efforts to advance pharmaceutical development and manufacturing. We are grateful to Delaware and Middletown for their leadership in fostering a strong entrepreneurial and innovation ecosystem, and we look forward to collaborating to deliver groundbreaking treatments for patients.”
Delaware has a growing field of companies focusing on small molecule inhibitors, a developing therapy that is more targeted in approach with fewer side effects than traditional cancer therapies like chemotherapy or radiation, including AstraZeneca, Inctye, Prelude Therapeutics and NiKang Therapeutics. The pharmaceutical contract manufacturing global market is expected to reach $120 billion by 2027, growing at a high-single-digit compound annual growth rate, according to a recent Research and Markets report that identified STA as one of nine top companies in the space.
STA has received approvals in more than 95 countries for branded drugs and currently operates four facilities in and around Shanghai, China’s largest city on its central coast. In 2016, STA launched its American operations with a 4,200-square-foot research and development lab and manufacturing plant in San Diego.
Comparatively, planning documents submitted to Middletown and state officials in May show that STA Pharmaceutical’s proposed Delaware site would measure 1.74 million square feet, featuring at least seven buildings. The entire campus would be built out in phases on 190 acres off Levels Road currently owned by investment firm Sherman Capital Markets.
According to Dean Childers, the project manager and future site leader, the first phase of construction would include 600,000 square feet of space in at least three buildings, including one for drug products, one for administration and one for drug substances. Construction is expected to start in May 2022, with the start of phase one operation planned for the first half of 2024.
The Middletown facility will feature space for testing laboratories; manufacture of active pharmaceutical ingredients (APIs); and manufacture and packaging of solid dosage pharmaceutical products and sterile products. Jobs at the site will include manufacturing operators, lab technicians, quality assurance and quality control staff, scientists and management, administrative and warehouse support staff.
“This is an investment in good jobs that will drive economic growth in southern New Castle County and across Delaware,” Carney said in a statement following the grant’s approval. “I want to be the first to welcome WuXi STA to our great state. Over the next five years, WuXi STA plans to build a state-of-the-art pharmaceutical manufacturing campus in one of Delaware’s fastest-growing communities. This campus will build on our strength in biopharmaceuticals – and it’s only possible because of Delaware’s world-class, innovative workforce. Thank you to WuXi STA, Middletown Mayor Kenny Branner and everyone who made this project possible.”
This breaking story will be updated.
