Texas Officials Lure Life Sciences Companies Like Merck & Co., Which is Expected to Employ 600

Published: Jul 25, 2017

Merck Invests $20 Million into a Texas IT Hub That is Expected to Employ 600 July 24, 2017
By Alex Keown, BioSpace.com Breaking News Staff

AUSTIN – New Jersey-based Merck is doing it big in Texas and moving forward with a massive project that could employ more than 600 people when it is fully operational. The global pharma company is investing more than $20 million to build its newest IT hub in Austin.

The new IT hub, which has been in the works for some time, was formally announced by the office of Gov. Greg Abbott earlier this week. The governor’s announcement followed an April incentives package approval from the Austin City Council that BioSpace previously reported.

Merck’s hub will become a key anchor in Austin’s growing medical community helmed by the Dell Medical School at the University of Texas at Austin. Merck said it is currently looking for space to open its facility, which could be near the university or the accompanying innovation center. The innovation center is part of a university vision to see companies working alongside academic researchers to advance health care.

Texas Secretary of State Rolando Pablos told BioSpace that Merck’s investment is a testament to the state’s “outstanding business environment” and “world-class workforce.”

“Governor Abbott’s leadership has been instrumental in attracting biotech leaders from around the world to the Lone Star State, and we look forward to fostering even more industry partnerships with our state’s top-notch medical facilities and innovative research institutions,” Pablos said in an email from a business junket to Spain.

Pablos has been instrumental in recruiting biotech and pharma companies to do business in Texas. The Merck hub is evidence of the energy and investments has and other state leaders have made on behalf of the state.

The Merck IT center in Austin will support its three other IT hubs in Branchburg, N.J., Prague and Singapore, the company said in a statement on its website. If the new IT hub moves forward as the company has said in planning meetings with the city of Austin, Merck could employ more than half of the expected 600 within the next four years and have about 100 employees by the end of this year operating out of a temporary facility. Merck has proposed investing $20.53 million in construction, approximately $2 million annually in local services, and about $500,000 in annual local purchases.

Clark Golestani, president of Emerging Businesses and global chief information officer at Merck, said in a statement the company has a goal that the new IT center, combined with the medical school and the Austin Healthcare Council “can connect technology and science to invent medicines and vaccines to help improve or save people’s lives.”

Merck said its IT hubs play an important role by “developing and leveraging technology to support the invention of novel medicines and help increase access to medicines to the people who need them.” As BioSpace previously reported, citing city documents, the Merck IT site would be focused on digital health and other information technology solutions.

While Merck’s employees will certainly be working on behalf of the company, Clay Johnston, inaugural dean of the Dell Medical School, said he hoped the pharma giant and the medical school will work toward “efforts to reduce health inequities, improve patient outcomes and lower costs to the community.”

Merck’s investment in Austin is being supported by a $6 million grant from the Texas Enterprise Fund. The TEF grant, among other funding programs available in the Lone Star state, has made Texas a hot destination for the pharma and biotech community. Last month during a meeting at BIO in San Diego, Pablos told BioSpace that Texas has a fast-growing biotech sector in cities such as Austin, Dallas, San Antonio, El Paso and Houston.

Gov. Greg Abbott said in a statement that he was encouraged by Merck’s investment in the state and was pleased with the high number of jobs the hub will provide. The jobs are expected to provide an average salary of about $85,000.

“This expansion is another example that Texas is the place where business and innovation come to thrive,” Abbott said in a statement.

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