By Caroline Copley
ZURICH (Reuters) - Swiss drugmaker Roche is to invest 800 million Swiss francs ($880 million) in its global manufacturing facilities over the next five years, creating 500 jobs, as it prepares for growing demand for its biologic medicines.
The world's largest maker of cancer drugs said on Monday the investment would increase its production capacity in Penzberg in Germany, Basel in Switzerland and Vacaville and Oceanside in the United States.
The expansion indicates Roche's confidence in its development pipeline of new cancer drugs and bucks a trend of cost-cutting by some big drugmakers in response to slowing sales growth.
Last week Israel-based Teva, the world's largest maker of generic drugs by sales, said it would cut 5,000 jobs, while Merck & Co plans to slash annual operating costs by $2.5 billion and eliminate more than 10 percent of its workforce.
Many of Roche's most promising medicines, such as rheumatoid arthritis treatment RoActemra and new breast cancer drugs Kadcyla and Perjeta are biologics, which unlike chemical drugs are proteins or cells derived from living organisms that are hard to replicate.
The Basel-based firm also has 39 investigational biologic medicines in its pipeline.
"As the world's largest supplier of biologics, Roche is committed to making the necessary investments to ensure ongoing supply of these medicines at the highest quality standards," said Daniel O'Day, chief operating officer of Roche's Pharmaceuticals Division.
The company said it would invest approximately 260 million Swiss francs ($286 million) at its Vacaville and Oceanside sites creating around 250 new jobs. In Penzberg, it will invest around 350 million francs ($385 million), creating roughly 200 positions.
Roche will also build a production facility in Basel to manufacture antibody-drug conjugates (ADRs) - also known as "armed antibodies" which can take drugs directly to cancer cells.
The company won U.S. approval in February for Kadcyla, its first such antibody-drug conjugate, which treats breast cancer with fewer side effects such as hair loss. ($1=0.9099 Swiss francs)
(Editing by Greg Mahlich)