Why AstraZeneca Stock Bumped Higher Today
Key Points
The pharmaceutical giant is plowing billions of dollars into expanding its drug-making capacity.
It has ambitious plans for two facilities in Maryland.
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AstraZeneca (NASDAQ: AZN) stock finished the trading week in style, rising by nearly 3% in value on Friday. That was due to news from the company that it's expanding its manufacturing footprint in the U.S. That price rise was high enough to convincingly beat the S&P 500 index, which crept up by almost 1%.
$2 billion for 2 facilities
AstraZeneca announced it is investing $2 billion in expanding its drug-making capabilities in Maryland, specifically at an existing plant in Frederick and a new one in Gaithersburg. The former is a manufacturing site for biologics, while the latter is planned as a state-of-the-art facility for innovative molecules that will be used in clinical trials.
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The pharmaceutical company said that once completed, the Gaithersburg plant will double its current capacity. This will allow it to produce the entirety of its rare disease portfolio at the plant.
AstraZeneca added that the two complexes are to harness artificial intelligence (AI) and automation in their processes. They are expected to be fully operational by 2029.
The Maryland projects are part of a much larger $50 billion global investment program announced by the company in July.
A good time for expansion
AstraZeneca is certainly ambitious, and these days it has the resources to make projects like this happen -- it held over $6 billion in cash at the end of its most recently reported quarter. Onshoring the rare disease drugs to this country is a clever move, given the size and resiliency of the U.S. market, and we could say the same for beefing up its presence in the Mid-Atlantic region generally.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends AstraZeneca Plc. The Motley Fool has a disclosure policy.
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