Park County officials are seeking $34 million in public funding to aid a major expansion of Cody Laboratories.
The proposed $106 million expansion of the pharmaceutical manufacturer would bring an estimated 250 jobs to the county during the next decade, local officials there said. The laboratory, which currently employs 110 people in Cody, makes the ingredients in pain medications.
Area officials touted the expansion as a boon to northwestern Wyoming’s economy, long reliant on the mineral, tourism and agricultural industries.
“Pain medications aren’t subject to the whims of weather, the whims of commodity pricing,” said James Klessens, CEO of Forward Cody, an economic development agency. “We’re going from a company that has several million in revenue to one that might have near a billion in the next 20 years. And what that does is stabilizes the economy of Cody and the Big Horn Basin.”
But officials must first convince Lannett Co., a Philadelphia-based pharmaceutical firm, to expand its manufacturing operations on the outskirts of Yellowstone National Park. Their pitch will largely hinge on whether Wyoming policymakers appropriate money for the project.
Under the Park County proposal, Lannett would contribute $71.5 million to the expansion. The approximately $34 million in state funding would come from several sources: a $24.4 million loan to be appropriated by the Legislature, $9.5 million in Wyoming Business Council grants and $1.2 million from Forward Cody. The money would pay for the installation of water, sewage and other infrastructure investments.
The Legislature is expected to take up the request during its budget session this month.
Lannett’s request for public financing was prompted by a desire to protect its investment in its current facility, a former Wal-Mart building on the west end of town, Klessens said. The company purchased Cody Labs in 2007 and has invested $50 million in its operations there, he said. If Wyoming fails to provide the money, Lannett could choose to expand in Pennsylvania, where its operations are currently centered, Klessens said.
The expansion calls for two new production facilities, power plant, machine shop and administrative offices to be constructed on a 25-acre plot in the North Cody Industrial Park.
The project would generate around $40 million in property and sales taxes while bringing up to 360 high-paying jobs to the area by 2026, Klessens said. The average salary of an employee at Cody Labs is $55,000, meaning a total payroll of around $20 million when the facility becomes fully operational, he said.
“This is a big project. This is a big dollar amount. I am acutely aware of the magnitude of the request,” Klessens said in reference to the public financing. “I think this is a worthwhile investment for the taxpayers of the state.”
Lannett CEO Arthur Bedrosian has committed to expanding in Cody with a state commitment, Klessens said.
The Cody City Council approved a revised development plan for the expansion in December. The plan has also received a warm reception from state officials.
Gov. Matt Mead signaled his support for the project in December after receiving a briefing from Cody Labs and officials in Park County. A Mead spokesman said Monday the governor looks forward to hearing more about the project and will be watching closely to see how the Legislature addresses the proposal in the coming budget session.
The expansion represents a unique opportunity to create high-paying jobs in a sector where Wyoming has little development, said Robert Jensen, CEO of the Wyoming Business Council.
“It does seem like from what we understand this expansion is well conceived and thought through,” Jensen said. “The expansion of the pharmaceutical industry in the state as a diversification opportunity seems like a significant opportunity for Wyoming.”
The expansion plan calls on two stages of development. The first would see work on a $3.6 million hazardous material warehouse begin this year. The second would see construction on the two production facilities begin in 2015. Initial plans call for the addition of three new production lines. The facility is projected to be operational by 2018.
But there are further opportunities for expansion at the two facilities, which would be able to accommodate up to 12 production lines, Klessens said. One new line a year could be installed at the cost of $8 million each between 2018 and 2026, he said.
Cody Labs is one of 12 facilities in the country with a license to import concentrated poppy straw, used in so-called active pharmaceutical ingredients. The laboratory essentially refines the raw materials into the ingredient that ultimately goes into pain medications such as oxycodone, morphine sulfate oral solution and cocaine topical solution.
Cody Laboratory officials couldn't be reached for comment.