Merck opens $1B vaccine manufacturing facility as part of North Carolina expansion
Merck announced the opening of a 225,000-square-foot vaccine manufacturing facility at its site in Durham, North Carolina. The company invested $1 billion in the plant, which will manufacture Merck’s human papillomavirus (HPV) vaccines Gardasil and Gardasil 9.
Described as a state-of-the-art manufacturing facility, Merck said it includes the use of digital technologies such as data analytics, generative AI, 3D printing, as well as a training center equipped with a digital twin — a virtual model of the shop floor manufacturing process systems.
Sanat Chattopadhyay, executive vice president and president of the Merck Manufacturing Division, said in a statement that the Durham expansion “marks a significant milestone in our efforts to strengthen our production and manufacturing capabilities in the U.S.”
Merck’s $1 billion investment in the Durham plant is part of the more than $12 billion the company said it has invested in U.S. capital expenditures since 2018 to bolster domestic R&D and manufacturing capabilities, according to the announcement. Merck said another $8 billion of U.S. capital investment is planned by 2028.
In Merck’s fourth-quarter 2024 earnings call last month, CEO Robert Davis said that demand for Gardasil “remains robust” outside of China and the company expects strong growth in 2025. However, the Chinese market is another matter.
“As we closed out 2024 and entered 2025, the market dynamics for Gardasil in China have remained challenging,” Davis told analysts. “Overall channel inventory remains elevated at above-normal levels.”
Working with its Chinese commercialization partner Zhifei, Merck made the decision to temporarily pause shipments to China beginning in February and through at least mid-year to better achieve a “more rapid reduction of inventory,” according to Davis.
During last month’s earnings call, CFO Caroline Litchfield was asked about Merck’s manufacturing footprint and the potential impact on the company from the Trump administration’s tariffs on Canada, China, and Mexico.
“We have very low levels of manufacturing happening in China, in Mexico and Canada, so we’d expect a very immaterial impact from tariffs,” Litchfield said. “We will continue to assess the situation based on the different tariffs that are being proposed by the U.S. government, but remain confident in our supply chain and our ability to supply our medicines and vaccines around the world.”