Reports: Novo Nordisk in talks to buy Petersburg Ampac plant

Two South Korean media outlets have reported that the South Korean owner of Ampac Fine Chemicals may sell its manufacturing plant in Petersburg to Novo Nordisk, the Danish global pharmaceutical company.

Sources told The Korea Economic Daily that the Seoul-based manufacturing conglomerate SK Group, which purchased Ampac in 2018 for a reported $576 million, is in “final-stage talks” to sell the 600,000-square-foot plant for $216 million to Novo Nordisk, with the deal possibly completed by the end of August, according to a June 25 article.

The Korea Herald reported June 26 that the potential sale could be part of a push on the Danish drugmaker’s part to increase production of its popular weight-loss drugs Wegovy and Ozempic. In late June, Novo Nordisk announced plans to invest $4.1 billion to build a second manufacturing facility in Clayton, North Carolina, adding 1,000 jobs.

A U.S. spokesperson for Novo Nordisk said Wednesday that the company has not yet announced any plans in Petersburg.

SK Pharmteco is SK Group’s contract drug-making subsidiary, with contract development and manufacturing organization (CDMO) plants in California, Texas and Virginia. In 2018, SK Holdings purchased California-based Ampac Fine Chemicals, then owned by H.I.G. Capital, a private equity firm. H.I.G. had owned the company since 2014 and was responsible for acquiring the Petersburg plant reportedly under consideration for sale to Novo Nordisk. In 2019, SK Group consolidated Ampac Fine Chemicals with its biotech divisions in South Korea and Ireland to form SK Pharmteco.

Ampac, founded in 1945, arrived in Petersburg in 2019, restarting a former pharmaceutical plant that had been closed for five years. Between 2020 and 2022, Ampac doubled production capacity and tripled its employee base to 150 workers. Currently, the company has three production buildings and 16 manufacturing lines making active pharmaceutical ingredients in Petersburg.

Ampac’s presence was a draw for other pharmaceutical companies — notably Phlow and Civica Rx — now with facilities in Petersburg. Civica, a Utah-based nonprofit generic drugmaker, is set to begin producing medications for general and local anesthesia, pain management and antibacterial therapies created with ingredients produced by Ampac and Phlow by late 2024. The three companies, along with Virginia Commonwealth University’s Medicines for All Institute, are partners on a federally funded $354 million contract to reduce U.S. dependence on foreign supply chains and promote domestic medication production. The contract, awarded in May 2020, finished its initial four-year phase in May, and is now in the first of six potential one-year renewal options.

In 2022, the 16-partner Alliance for Building Better Medicine, which includes the three pharma companies, won a $52.9 million Build Back Better Regional Challenge grant from the U.S. Commerce Department’s Economic Development Administration to address the national need for domestically produced drugs. In October 2023, the EDA designated the Richmond-Petersburg metropolitan statistical area an Advanced Pharmaceutical Manufacturing Tech Hub, qualifying it to apply for additional funding, but the region missed out on $502 million in federal grants announced in July.