ZURICH, July 27 (Reuters) - Swiss drugmaker Novartis's Sandoz division and the Austrian government will invest about 150 million euros ($176 million) to shore up antibiotics production at a plant in Tyrol, the company said on Monday.
Sandoz plans to strengthen the competitiveness of its antibiotic manufacturing operations at Kundl by developing technology for active pharmaceutical ingredients and finished dosage forms, it said.
Under the plan still subject to formal approvals by both parties, the Austrian government would line up public funding worth about 50 million euros towards the total investment.
"Antibiotics are the backbone of modern medicine and our Kundl facility in Austria is the hub and centre of the last remaining integrated production chain for antibiotics in the western world. This joint investment will help to keep it that way," Sandoz Chief Executive Richard Saynor said.
Government funding would primarily support new technology to produce active ingredients for penicillin products at Kundl.
Sandoz would commit to penicillin API production in Europe for the next 10 years despite fierce global price competition, particularly from China, the company said.
Sandoz could produce enough penicillin at Kundl to meet all current Europe-wide demand, it added.
$1 = 0.8544 euros Reporting by Michael Shields; Editing by Edmund Blair