State-tax credit spurs Cephalon to expand its Salt Lake City operations

The Governor's Office of Economic Development Board on Thursday approved a nearly $1.7 million tax credit for Cephalon Inc. to relocate its contract manufacturing business to Salt Lake City.

The Pennsylvania-based company's expansion will add $18 million in facilities and equipment and more than 50 full-time jobs over 10 years to its existing operations in Salt Lake.

"The state of Utah has been integral to the growth and success of Cephalon," said Peter Grebow, executive vice president of worldwide technical operations at Cephalon, in a prepared statement after the board meeting. "Our decision to further expand our manufacturing capabilities in Utah is based on our ability to access world-class talent, as well as to develop important partnerships with leading research universities in the state."

Grebow said his company also appreciated that the state had fostered growth of the biopharmaceutical industry in Utah. The governor's office, Utah Legislature and the Economic Development Corp. of Utah have helped develop policies "to ensure that Utah is recognized as one of the leading life sciences clusters in the nation," he said.

The incentive requires the company to pay an average of 25 percent above the Salt Lake County average wage for the new jobs. The state could see more than $37 million in new state wages over 10 years and more than $6.5 million in new state revenue during that same period, board documents show.

Cephalon had sought a $2.2 million incentive.

Founded in 1987, Cephalon focuses on products including those to treat the central nervous system, pain and cancer. The company has about 3,000 employees in the United States and Europe.

The company owns or leases more than 300,000 square feet of space in Salt Lake. Following the expansion, it will have spent more than $150 million in Utah on facilities and equipment, according to board documents.

Cephalon entered Utah when it acquired Salt Lake-based Anesta Corp. in 2000. Anesta's hallmark product was Actiq, a cancer-pain product resulting from technology developed at the University of Utah. Since the 2000 acquisition, Cephalon has paid more than $50 million royalties to the U. "This has been a very, very good, strong corporate citizen to the state of Utah," said Jerry Oldroyd, chairman of the board's incentives committee, during the board meeting.

In August 2006, Cephalon marked the completion of a $100 million expansion in Salt Lake City that was designed to accommodate 500 workers.

The company had received Industrial Assistance Fund approval for $2.1 million in early 2004 but ran into delays in getting the expansion going. In April 2006, the GOED board reworked the Cephalon incentive, switching it to a tax rebate of up to $2.1 million and tying it to adding 365 new full-time jobs. The company currently has 200 employees in Salt Lake.

E-MAIL: bwallace@desnews.com

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