AveXis, the gene therapy biotech Novartis snapped up for $8.7 billion, will build a new manufacturing plant to produce its specialized therapies.

The company will build its $55 million plant in Durham, North Carolina, officials announced Tuesday. The company, which expects to employ about 200 at the plant, will get up to $3 million in incentives from the state.

"Our primary focus is to bring gene therapies to patients suffering from devastating rare neurological diseases—such as SMA, genetic amyotrophic lateral sclerosis and Rett syndrome—and continued investment in establishing our manufacturing infrastructure is a critical component to accomplishing this goal," Andrew Knudten, AveXis chief technical officer, said in a statement.

AVXS-101, the initial gene therapy candidate from the Bannockburn, Illinois-based biotech, is targeted at spinal muscular atrophy, or SMA, Type 1, which is the leading genetic cause of infant mortality.

The new plant compliments AveXis’ "existing state-of-the art manufacturing site in the Chicagoland area," Knudten said. Bannockburn is about 30 miles from Chicago.

According to a spokesperson, the 170,000-square-foot facility in Durham will primarily produce drug substance, while the 50,000-square-foot plant in Illinois is expected to produce both clinical and commercial product. Construction on the new facility is slated to begin in the second half of this year and be completed in the second half of 2020.

Analysts said the $8.7 billion deal showed that Novartis’ new CEO, Vas Narasimhan, is prepared to make hefty bets to be a lead player in emerging therapies, which come with specialized manufacturing methods. The AveXis takeover gives Novartis an AAV9 gene therapy manufacturing operation, R&D capabilities and pipeline of prospects to support its ambition to claim a sizable slice of the sector.

Novartis was already the first company to win an FDA nod for a CAR-T therapy with the approval in August of Kymriah. The one-time treatment, which is priced at $475,000, is made from a patient’s own T cells, which are collected and then re-engineered at specialized manufacturing facilities, and then infused back into the patient to attack cancer.

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