Introducing Cape Breton's New Pharmaceutical Industry

N.S. BUSINESS INC.--Introducing Cape Breton's New Pharmaceutical Industry

Two projects that will lay the groundwork for a pharmaceutical industry in Cape Breton were announced today, Dec. 3. The announcement was made by Premier John Hamm and Joseph McGuire, federal minister for Enterprise Cape Breton Corporation, the Cape Breton Growth Fund and the Atlantic Canada Opportunities Agency (ACOA).

Keata Pharma Inc., a contract pharmaceutical manufacturing company is establishing a manufacturing operation in the Northside Industrial Park, in North Sydney. The project is receiving financial assistance from the growth fund, Enterprise Cape Breton, ACOA and Nova Scotia Business Inc. (NSBI). It is expected to bring about 165 new jobs to the Cape Breton Regional Municipality over the next three years.

In a related project, the University College of Cape Breton (UCCB), in partnership with the company, will launch a new biotechnology and pharmaceutical technology certificate program to train potential employees. This project is also being supported through Enterprise Cape Breton.

PharmEng Technology Inc., the parent company of Keata, will also establish a pharmaceutical consulting office in Cape Breton, employing an additional 12 professional staff. PharmEng is an established pharmaceutical and biotechnology consulting firm based in Toronto, with offices in Montreal, Winnipeg, Vancouver and China.

"This project is a great example of how partnership is working to create local opportunity by attracting growth-oriented, export- driven companies like PharmEng to Nova Scotia," said Premier Hamm. "Led by our business arm, Nova Scotia Business Inc., the province is proud to be part of the team that is injecting new dynamism and diversity into the Cape Breton and Nova Scotia economies. Initiatives such as this represent an evolution of business thinking and business development."

"These exciting projects will build on the existing strengths of our workforce and bring a new industry to Cape Breton," said Mr. McGuire. "The joint venture with UCCB will enable Keata to recruit and train locally, resulting in a pool of highly skilled pharmaceutical personnel. With this investment, Keata is demonstrating its belief in the power of Cape Breton. I would like to recognize the efforts of the Cape Breton Growth Fund in recruiting this company to the community."

Keata's move to Cape Breton will better position the company to diversify its products and services. Over the next year, the company will acquire equipment and necessary approvals to provide formulation development, testing services and to manufacture and package products in solid and liquid dosage forms. Keata's long- term goal is to produce more technologically challenging products and develop capabilities in other dosage forms, such as suppositories, topicals and injectables.

UCCB's biotechnology and pharmaceutical technology certificate program will be taught jointly by PharmEng and UCCB. Up to 25 students will be accepted into the program annually. PharmEng is expected to offer employment to at least 60 per cent of the first graduating class.

"UCCB's co-ordination of a biotechnology and pharmaceutical technology certificate program will provide the necessary skills training for these positions," said John Harker, president of UCCB. "With Keata PharmEng's commitment to hire students of this innovative program, it is refreshing to know that many of these graduates will be employed right here at home. We see UCCB as an emerging force in the advanced technology transfer and the future for UCCB and the Island will be built on announcements of the kind we are celebrating today."

The PharmEng consulting office will initially provide the technical support for the Keata plant during construction and start up. Over time, the office will provide consulting services to clients in Atlantic Canada, the Eastern United States and other international markets.

"We feel that our Cape Breton location will provide us with significant long-term cost advantages and access to a highly skilled labour force," said Alan Kwong, managing director of PharmEng. "Our new location on the Island will help us better serve the growing global pharmaceutical manufacturing market that is valued at $50 billion annually."

The total start up cost of the Keata project is $12.5 million, and includes construction of a new 35,000 square-foot facility, equipment, regulatory compliance and marketing. The plant will be operational in early 2006. To assist with costs, the growth fund and Enterprise Cape Breton are investing a total of $6.25 million by way of repayable loans.

NSBI will assist the company in the creation of new jobs through a payroll rebate of up to $3,590,800. Performance based, the NSBI payroll rebate will be paid annually over a period of five years, as job creation goals are achieved. The agreement provides for incentives for up to 300 jobs.

The total cost of launching the UCCB certificate program is $500,000. UCCB will receive a non-repayable contribution of $375,000 through ACOA's business development program. In addition, PharmEng will receive a non-repayable contribution of $125,000 through Enterprise Cape Breton.