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Amgen, expecting higher demand for its medicines, to build plant in North Carolina

Facing increased competition for many of its top-selling drugs, Amgen is focusing on building its pipeline of drugs for the future, especially in the areas of oncology and inflammation. In March, the company announced plans to pay $1.9 billion for cancer drug specialist Five Prime Therapeutics and then last week agreed to acquire privately held TeneoBio and its antibody drug technology for $900 million.

Company CEO Bob Bradway told investors on Tuesday that spending more than $900 million on two new manufacturing sites in the U.S. is necessary to meet expected demand.

The company also expects the facilities will help it meet its goal of becoming carbon neutral by 2027. The Holly Springs site should be able to reduce water use by 40% and waste disposal by 75%, compared with a traditional plant, Amgen said.

The North Carolina facility will use both traditional stainless steel-fed batch manufacturing and more modern single-use technologies, according to Amgen. The company says this “FleXBatch” manufacturing plan will allow the plant to be more efficient and taking up less space than a traditional site.

With prominent institutions such as Duke University and University of North Carolina at Chapel Hill, the Raleigh-Durham area of North Carolina has long been a top draw for top drugmakers and tech companies. And the state as a whole is focused on getting more business.

North Carolina offered Amgen a job development investment grant that could reimburse the company as much as $11.6 million over 12 years. The state said it expects the Amgen project to grow its economy by $2.5 billion and provide salaries to North Carolina workers that average almost $120,000.

Over the last few years, Pfizer, Eli Lilly, Astellas and Biogen have all announced plans to pour hundreds of millions of dollars into manufacturing facilities in the state. Fujifilm earlier this year said it will spend $2 billion on a large-scale cell culture manufacturing site in Holly Springs.

For roughly three decades, Amgen has relied on its large manufacturing presence in Puerto Rico to produce many of its medicines. On Tuesday, however, the company disclosed a dispute with the Internal Revenue Service over how it accounted for profits between the territory and mainland U.S. The IRS is seeking more than $3 billion in additional tax receipts from the company related to the years 2010, 2011 and 2012.