Irvine-based drug maker Allergan Inc. is looking east for expansion as its research and development operation grows.
The maker of Botox and other drugs and medical cosmetics is scouting for a site in New Jersey to build a $12 million, 100,000-square-foot research and development center that could create some 400 new jobs over the next three to five years.
Allergan chose New Jersey instead of California for the new center because of the state’s workforce, which has large numbers of workers trained in drug making, and its proximity to many clinical trial sites on the East Coast, said Scott Whitcup, Allergan’s executive vice president for research and development.
Hiring Challenges
“My philosophy is that great people are a key component of being successful,” Whitcup said. “We always struggle to hire as quickly as we want, with finding great people.”
The drug maker looks “where there might be skilled workforces—and there’s a big pharmaceutical industry that’s grown up on the East Coast, in that area. We certainly have tried to relocate people from California, but sometimes people are tough to relocate.”
New Jersey is a long-established center for drug makers, with big companies such as Johnson & Johnson and Merck & Co. having major operations in the state. September figures from the U.S. Bureau of Labor Statistics show that the state has 32,000 workers in the drug industry, or 12% of the national total of 273,000.
The 15 largest drug makers in Orange County combine to employ about 5,500 workers here. Allergan accounts for about two-thirds of them.
Whitcup said there could eventually be more work in Cal-ifornia, depending on what sorts of projects draw research and development dollars.
“This is our key R&D facility,” Whit-cup said of Allergan’s Dupont Drive campus in Irvine, which has a research and development center. “It was not a decision (of) one versus the other. California’s growing, but R&D’s growing even faster than we can keep up.”
Allergan spent $221.3 million, or about 17% of its $1.33 billion in third-quarter sales, on research and development. That’s a 14% increase from a year earlier.
The company’s “had a lot of success in the R&D pipeline and looking forward, there’s still greater investment that we plan to make,” Whitcup said. “We’ve got a lot in the pipeline that we want to get done.”
Gov. Christie
News of plans for the new research and development center came last week with a press release from New Jersey Gov. Chris Christie.
Christie visited Allergan in September, while he was in California to speak at the Ronald Reagan Presidential Library. He met with Whitcup and Allergan Chief Executive David Pyott, who was traveling last week and unavailable to comment on the company’s expansion plans.
“Basically, what Gov. Christie did was highlight one, the fact that they had a skilled workforce,” Whitcup said. “Our main driver was finding the right people to execute the pipeline.”
Allergan has a small office in Bedminster Township, which is located in Somerset County in the northern part of the state. It employs about 20 workers there.
$17M in Incentives
Last week, the New Jersey Economic Development Author-ity voted to offer Allergan up to $17 million in incentives over a 10-year period to put a facility in that state.
Economic incentives, while important, weren’t the deciding factor to locate the center in New Jersey, according to Whitcup.
“From the start, we said, ‘where’s the best place for Allergan R&D?’” he said.
No specific time’s been set for the New Jersey center’s opening, said Cathy Taylor, an Allergan spokeswoman.
“We’re going to be expanding over the next three to five years,” she said.
The New Jersey incentives are based on the creation of about 389 jobs, authority spokeswoman Erin Gold said.
Some published reports indicated that Allergan might have considered Pennsyl-vania, but Taylor said the company “quickly landed on New Jersey” and that its search “has been very focused on New Jersey.”
SEC Probe
Separately, Allergan said in its quarterly report with the Securities and Exchange Commission that the Massachusetts attorney general’s office has asked it to provide documents on its eye-care business, which historically accounts for about half of its $5 billion-plus in total revenue.
The filing shows that the attorney general’s Medicare fraud division requested information relating to the drug maker’s Eye Care Business Advisor Group, Allergan Access and BSM Connect for Ophthalmology, ac-cording to a Bloomberg report.
In the quarterly filing, Allergan said it received what’s called a civil investigative demand in September.
The attorney general’s office, through a spokesperson, said its policy is to “neither confirm nor deny investigations.”
