Merck to build Austin tech hub
Pharmaceutical giant to get $6 million from state, create 600 jobs.
Merck Sharp & Dohme Corp. will build a major technology innovation center in Austin, providing a critical private-sector anchor for the innovation dis
trict developing around the Dell Medical School.
The global pharmaceutical giant agreed to move forward with the new center — its fourth such facility worldwide — after Gov. Greg Abbott pledged a $6 million grant from the Texas Enterprise
Fund. That grant comes on top of a 10-year, $856,000 city tax incentives package approved by the Austin City Council in April.
In return, Merck said it will create at least 600 jobs, paying an average annual salary of $84,586, and it would invest almost $29 million to build and equip the innovation center.
While the governor’s grant sealed Merck’s decision, the com- pany previously said the Dell Medical School and other local factors made Austin its preferred location for the hub, which will focus on data collection and the design of technology platforms for “personalized, proactive and preventative health care.”
In its application for city tax incentives, Merck said its mission “aligns with the (University of Texas), Central Health, People’s Community Clinic and many other groups that could support the transformation of health-care delivery and affordability.”
At the time, Merck said it could create 119 full-time jobs and spend almost $6.4 million to equip a temporary facility by the end of this year. By 2020, it would target a payroll of 341 full-time jobs and a $20.2 million investment to build and equip a long-term office space.
Merck says it expects to locate the center at the medical school or in the adjoining innovation zone. Either way, said state Sen. Kirk Watson, D-Austin, the Merck center puts “a whole lot of meat
on the bone” for the new district.
The new Merck facility joins the medical school, the teaching hospital and the school’s new clinical facilities, with the first executive director at Capital City Innovation Inc. to help coordinate the district’s efforts.
“The basic building blocks are there — and they’re starting to bear fruit,” Watson said. “The next part of it will be the actual redevelopment of the Central Health property . ... In a very short order, we’ve shifted gears. And now the pace will pick up.”
Watson said he expects Merck, the medical school and other local partners will “change things globally” for health care, and that the fundamental mission of Central Health, the medical school and the innovation zone will also ensure local benefits.
Merck already has engaged in conversations with leaders at a variety of Central Texas health care, educational and workforce organizations. “We look forward to working with the innovative and collaborative community there, including partners like the Dell Medical School at UT Austin and the Austin Healthcare Council,” Merck global CIO Clark Golestani said.
While some of the detailed discussions were put on hold until the official announcement, medical school officials continued to study possible ways to partner with Merck on a variety of projects, said Mini Kahlon, vice dean for strategy and partnerships.
Potential initiatives include efforts to eradicate human papillomavirus and cervical cancer in Austin, pilot projects around better use of health data, and community-based programs that bolster the training pipeline from schools to health care jobs.
Yet Kahlon said she and her colleagues also have engaged with Merck officials to make sure the center’s sheer mass doesn’t become a black hole for Austin’s smaller health care companies and entrepreneurs.
“We want to make sure the pendulum doesn’t move the other way,” she said. “We want to make sure this is an additive part of ecosystem, not a squasher of smaller homegrown (firms),” she said.
Still, she said, it’s hard to overestimate the impact a globally known company with an extensive reach and research capability can bring to Austin’s tech and medical community. For example, as algorithms and artificial intelligence become increasingly influential components of medical and technological research, the private sector’s mountains of data become increasingly vital to new discoveries.
So, as UT’s medical, computer science and engineering schools develop algorithms, systems and data processing techniques — and the clinical health care setting to integrate and test new developments — Merck brings enterprise-level data and the ability to work at a massive scale, Kahlon said.
“To want to be a hub of health care innovation without any of the major pharmaceutical (or other major health care players) was just not going to be possible,” she said. “Now it’s up to us to leverage the infusion of this kind of talent at this scale and align it with our community initiatives.”
Even the possibility of a Merck hub in Austin spurred interest from companies that the Greater Austin Chamber of Commerce previously tried to recruit with little luck, officials there said.
“The potential partnership between Merck and Dell Medical School is a testament to the qualities of Austin as a place for investment in medical technology and health care delivery as well as our city’s ability to work together to recruit great businesses and jobs,” said Kerry Hall, the chair of Opportunity Austin, which helped recruit Merck.