Teva Pharmaceuticals got $4.7 million in state aid for new Philadelphia facility

Teva Pharmaceuticals USA said Thursday that $4.7 million in state aid helped persuade the pharmaceutical giant to put its new distribution facility in Philadelphia's Bustleton neighborhood, where the company hopes to employ 500 people in the next five years.

Teva, a fast-growing maker of generic drugs, expects to employ 250 people initially at the proposed $295 million facility.

The 1.2-million-square-foot distribution buildings will sit on 136 acres at 1 Red Lion Rd., formerly home to Budd Co.'s railcar division, which closed in the 1980s.

William Marth, chief executive officer of the Israeli company's American operations, said government officials from many places had tried to lure the facility.

Teva favored Philadelphia and Pennsylvania for many reasons besides the state grants and tax credits, Marth said, but, mostly, because "it's our home."

Teva's U.S. headquarters are in North Wales. The new distribution center will not affect those operations, Teva officials said. The company also had considered Willow Grove and Warrington for the new facility.

The Island Green Country Club now at the Red Lion Road site will close, said Greg Rogerson, principal of J.G. Petrucci Co., which is working with Teva on the new facility.

In April, Teva announced that it was eliminating some jobs at its Sellersville manufacturing plant, but the company has not said how many employees were affected.

At Red Lion Road, the company will construct three buildings for distribution, warehouse, and office space. Marth said he expected it to open in 2013.

Mayor Nutter said the construction phase should employ 400 to 600 workers.

Gov. Rendell, who also attended Thursday's news conference announcing the deal, said he believed Teva would employ as many as 1,000 people there in 10 years.

For now, however, Teva says total employment at the Red Lion Road site will reach 500 in the next few years.

Rendell's projections were based on Teva's strong growth. It is the world's largest maker of generic drugs, which are expected to continue to gain market share as patents expire on brand-name products.

Teva Pharmaceutical Industries Ltd. specializes in developing and selling generic and proprietary drugs. It had 2009 revenue of $13.9 billion and net income of $2 billion. Marth said he expected revenue to hit about $16 billion in 2010.

Acquisitions have fueled much of that growth. In 2008, Teva acquired Barr Pharmaceuticals Inc., a maker of generic birth-control pills, for about $7.5 billion.

Generics are federally approved medications that contain the same amount of the active ingredient as brand-name drugs. They are significantly less expensive, making them a popular choice as consumers and businesses seek ways to lower health-care costs.