Delaware commits $30M to entice pharma giant to Wilmington area

Why Should Delaware Care?
A recent big-ticket award from Delaware’s economic development office hopes to bring more biotechnology jobs to Delaware. It also is among the first taxpayer grants awarded by the new Meyer Administration and comes after Gov. Meyer pledged to reign in grants to big companies.

Delaware economic development officials on Monday awarded the pharmaceutical giant Merck and Co. more than $30 million on the condition it expands its manufacturing operations at a location just outside of Wilmington. 

The company has considered plans to build a facility at the Chestnut Run Innovation and Science Park but has not yet committed to it, according to state officials. Merck said that facility, if built, would employ 375 people. 

The massive grant would be among the largest investments by the state into a private company in recent memory.

Merck, a global pharmaceutical company with a market cap of over $200 billion, already has a manufacturing presence in southern Delaware. The company produces a wide array of drugs and vaccines, in addition to animal health products.

In a slideshow presentation for Delaware economic development officials, Merck said if it chooses Delaware it would invest $900 million into a “multi-building complex” that would be fully operating by 2030.

Roughly $330 of that amount would fund construction of new buildings, according to company documents submitted to the state. Another $290 million would pay for equipment and machinery. And $80 million more would cover the costs of what the company calls “furniture, fixtures, inventory, etc.”

Merck did not respond to requests for comment. 

The grant comes almost four years after the state made a separate high-dollar gamble on pharmaceuticals, when officials awarded Shanghai-based Wuxi Apptec $19 million to build a new manufacturing campus in Middletown. 

At the time, WuXi said it would invest $510 million into the facility. But last year, Congress considered a bill to ban American companies from working with some biotechnology companies tied to foreign adversaries, including China.

That bill has placed the future of the Middletown facility into question. 

Delaware’s Council on Development Finance, which approved Merck’s grant and Wuxi’s, makes its awards based on recommendations from a public-private entity governed by some of the state’s most prominent business leaders and by Gov. Matt Meyer.

That entity, the Delaware Prosperity Partnership, is a nonprofit organization first established under former Gov. John Carney to attract business development to the state. Many on its board of directors are either in the state legislature or executives of Delaware’s top businesses. 

In a statement to Spotlight Delaware, the Delaware Prosperity Partnership said it’s “thrilled” to see Merck considering an expansion in the state. 

“Merck has a strong record of success, including developing medicines to help heal the world,” a spokesperson for the group said. “This project would reinforce Delaware’s standing in the global biopharmaceutical ecosystem, and we are excited by the potential opportunities it would provide Delaware residents and businesses.”

The approval of $30 million for the global pharmaceutical giant comes after Gov. Matt Meyer has said he intends to shift the way Delaware does economic development, by awarding fewer taxpayer grants to large companies and more to small companies. 

“Let’s focus our resources on things that matter the most to the companies and employees of today and tomorrow,” Meyer said during a speech in front of the Delaware State Chamber of Commerce last month. 

It is not clear how the $30 million grant to Merck fits into Meyer’s overall philosophy. A spokesperson for his office did not comment on the appropriation. 

A spokesperson for the MRA Group, which owns the park where Merck may build, declined to comment for this story.

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