AstraZeneca to build $1.5bn manufacturing site in Singapore

AstraZeneca is investing $1.5bn in a manufacturing site in Singapore dedicated to the production of antibody drug conjugates, an advanced form of chemotherapy that the drugmaker believes could replace conventional treatment.

ADCs deliver toxic drugs directly to cancer cells, avoiding damage to surrounding healthy tissue. AstraZeneca has a portfolio of the drugs, including Enhertu, which is currently manufactured by its Japanese partner Daiichi Sankyo and generated more than $2.5bn in sales last year. It is used for breast and lung cancer.

AstraZeneca’s investment in its first fully dedicated ADC site underlines the importance of the drug category to its future business and is the first time the drugmaker has built a manufacturing presence in Singapore.

AstraZeneca said on Monday that the move was supported by Singapore’s Economic Development Board but neither AstraZeneca nor the EDB disclosed what incentives it would receive from the Singaporean government. A person with knowledge of the deal said the package included tax exemptions and other government subsidies.

Construction of the site will begin this year, and the company expects it to be operational in 2029.

Singapore, a small island city-state, has limited space, and in recent years has focused on luring foreign high-tech manufacturing with generous subsidies and tax incentives. 

The country has more mature manufacturing facilities compared with neighbouring countries in south-east Asia such as Malaysia and Indonesia, and has benefited immensely from supply chain shifts as companies diversify away from China.

Companies including Siemens have unveiled big investments in Singapore in recent years, with the German group announcing a high-tech plant in the city-state last year. Taiwan semiconductor giant TSMC and its affiliate Vanguard International Semiconductor have had talks with the government about using the city as a manufacturing hub. 

Singapore is also close to some of AstraZeneca’s fast-growing markets in south-east Asia. Sales in the company’s emerging markets excluding China increased 24 per cent in 2023, making it AstraZeneca’s fastest-growing area.

AstraZeneca said last month that it wanted to build separate supply chains for the US and Europe.

Pascal Soriot, AstraZeneca’s chief executive, said: “Singapore is one of the world’s most attractive countries for investment given its reputation for excellence in complex manufacturing.” He added that “antibody drug conjugates have shown enormous potential to replace traditional chemotherapy for patients across many settings”.

The announcement comes after AstraZeneca said in February that it would spend $300mn on a new facility in Rockville, Maryland, to make another form of advanced cancer drug and announced a $388mn investment in its manufacturing sites in Dunkirk, France, last week, as it meets demand for its medicines.

The update comes ahead of an investor day on Tuesday, when the British drugmaker will share more detail on its plans for investment by 2030.