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Innovative construction project boosts Merck's Zostavax manufacturing

Company expects shingles vaccine to reach potential now that production issues have been solved
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It has taken 6 years, but with a significant manufacturing expansion, Merck ($MRK) has gotten its manufacturing and supply issues addressed for its shingles vaccine Zostavax.

With increased production and growing supplies, the company hopes to regain some of the momentum with the drug that was lost when failing ingredients relegated production to the back burner. The company has started an advertising awareness campaign around shingles.

"We're confident enough in Zostavax to come out of back order and launch" the ads, Julie Louise Gerberding, president of Merck Vaccines, tells The Wall Street Journal.

The company had big expectations for the shingles vaccine when it was first released in 2006. Analysts predicted sales could reach $1 billion. But Merck quickly ran into supply issues when a batch of an ingredient didn't meet standards. Merck moved production of its chickenpox vaccine Varivax ahead of the shingles vaccine. In 2008, the company reported shipping delays. A year later, when it believed it was on top of the issue, supply issues cropped up again. Complicating the situation is the fact that Zostavax  has to be shipped and stored frozen, but many primary care physicians don't have freezers in their offices. Patients sometimes rely on pharmacies to provide the shots.

Merck resolved to get on top of the issue. It launched a "program of projects" at its vaccine bulk manufacturing facility in Durham, NC, using a modular construction strategy for off-site fabrication and equipment testing to speed the work. The $1 billion investment and resulting 214,000-square-foot facility doubled the output of Zostavax and Varivax. The project was so successful in January it was named "Facility of the Year" in a competition.  

Gerberding tells the WSJ that the company also modernized equipment and increased production at its West Point, PA, plant and that by last year, it had enough supply that it could probably have sold more product than it did. Sales of Zostavax were $332 million in 2011. Now that Merck is confident the manufacturing process can meet greater demand, it will again try to capitalize on being the only company with a vaccine for the painful disorder.

- read the WSJ piece

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