Newcomers Buy Drug Production Plants

Two relatively new entrants to the pharmaceutical chemicals business are buying plants that are being sold by drug firms as they restructure their manufacturing operations.

PRWT Services, a 20-year-old minority-owned business involved primarily in labor and facilities management, has acquired Merck & Co.'s Cherokee active pharmaceutical ingredients facility in Riverside, Pa. Its newly formed Cherokee Pharmaceuticals subsidiary has a five-year supply agreement with Merck worth $100 million to $200 million per year.

Philadelphia-based PRWT intends to invest in the Riverside plant, which employs 400 people, to support business and job growth. "By establishing a presence in the life sciences market, PRWT can now participate in an industry with tremendous growth potential and establish a strategic supplier relationship with Merck," says CEO Willie F. Johnson.

Separately, Keata Pharma, a subsidiary of Canada's PharmEng International, will purchase Pfizer's Arnprior, Ontario, formulation facility and retain its 175 employees. The deal includes a three-year supply agreement for Pfizer products; Keata will also manufacture for two other major drug companies under multiyear agreements. In November, the company opened a formulation development and manufacturing facility in Cape Breton, Nova Scotia.