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ScieGen Pharmaceuticals wants to boost production of medicines

The drugmaker plans to convert warehouse space to

The drugmaker plans to convert warehouse space to a factory. Credit: Danielle Silverman

A manufacturer of generic prescription drugs is expanding again in Hauppauge, converting warehouse space to production space and adding more than 100 jobs, officials said Thursday.

ScieGen Pharmaceuticals Inc. will transform much of 330 Oser Ave. into 65,000-square-feet of additional factory space, including part of the first-floor warehouse and a planned second-floor mezzanine. The company must boost production to meet increased orders for its generic prescription medicine, said chief financial officer Renee Reynolds.

The $15.5 million project was awarded $1.3 million in tax breaks by the Suffolk County Industrial Development Agency on Tuesday. The lion’s share of the incentives are a $512,730 reduction in property taxes over 12 years and a sales-tax exemption of up to $733,125 on the purchase of construction materials and equipment.

The incentives overlap with $2 million in IDA tax breaks awarded in 2015 to ScieGen and its sister, vitamin maker Bactolac Pharmaceutical Inc., when they purchased and renovated the Oser Avenue building. That deal included $1.5 million off property taxes over a period of up to 15 years.

Together, the companies have 712 employees in Suffolk, and they earn, on average, $47,666 per year.

Bactolac and ScieGen, together, have added 244 jobs in the county in the past five years, exceeding the hiring promises made in return for IDA tax breaks. The companies also employ 200 people in India.

Reynolds told the IDA that ScieGen needs more production space “to meet the growing demands” of its customers and “to continue to bring new affordable prescription drugs into the market.”

She said the expansion will create 106 jobs within two years.

IDA executive director Anthony J. Catapano said ScieGen and Bactolac are part of a growing pharmaceutical industry that is the backbone of Long Island’s manufacturing sector, which once was dominated by aerospace colossus Grumman Corp.

“The pharmaceutical industry could grow to reach the same tier in the innovation economy as Long Island aviation,” he said on Thursday. “And there is no better time to assist pharmaceutical companies than right now during the height of a public health and economic crisis.”

ScieGen was started in 2009 by the Reddy family who founded Bactolac in 1995 in Westbury. Both companies are led by Pailla M. Reddy and the Suffolk IDA began helping them in 2007.

ScieGen now operates from two buildings while Bactolac has six, all in Hauppauge, IDA records show.

At Thursday's IDA meeting, board members Kevin Harvey and Josh Slaughter, both union leaders, asked the Bactolac/ScieGen executives to use local construction workers, citing increased unemployment due to the coronavirus pandemic.

"We have thousands of construction workers here on Long Island that are out of work right now," Slaughter said. "Projects like this are going to be critical to getting those folks back to work."

Reynolds, the companies' CFO, said they will contact the unions representing construction workers.

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