Swiss pharmaceutical giant Novartis announced Thursday that it plans to build a $1.1 billion research hub in San Diego as part of its $23 billion investment in U.S. operations over the next five years.

The investment will create nearly 1,000 new jobs at Novartis and about 4,000 additional jobs in the U.S. as the company plans to construct seven new facilities, ensuring all “key Novartis medicines for U.S. patients will be made in the United States,” the company said.

The news comes as the pharmaceutical industry prepares for potential tariffs on drugs imported into the U.S. So far, President Donald Trump has exempted medicines, but this week he said pharmaceutical tariffs would be coming “very shortly.”

Novartis did not respond to the Union-Tribune’s request for comment Thursday about the timing of the announcement as it relates to Trump’s tariffs.

The Novartis deal also marks a significant investment in the local life science sector, where it has become more common to see companies announce layoffs or cutbacks on their research and real estate footprint, following a pandemic-high in health care investment.

The new San Diego hub is billed as the heart of the Novartis West Coast Biomedical Research presence and a “state-of-the-art research facility” focused on the development of future medicines.

It is expected to open between 2028 and 2029, the company said, making it Novartis’ second research and development center in the United States. The other research hubs are in Cambridge, Mass., and at the company’s homebase in Basel, Switzerland.

Novartis did not disclose where it plans to set up the new research center, how large it will be or how many it would employ.

“This is great news for San Diego and speaks to San Diego’s identity as a core life science market in the country,” said Joshua Ohl, the senior director of market analytics for real estate tracker CoStar. “It should bring new jobs and provide a positive economic impact for the region.”

In recent years, real estate investments of this magnitude have been rare. Ohl said the last local real estate commitment in the $1 billion realm that he recalls might include IQHQ’s downtown Radd development or Blackstone’s purchase of 66 apartment complexes in 2021.

The global drugmaker’s therapeutic focus spans cancer, immunology, neuroscience, cardiovascular, renal and metabolic treatments. One of Novartis’ well-known products includes a breakthrough treatment for heart failure called Entresto.

“As a Swiss-based company with a significant presence in the U.S., these investments will enable us to fully bring our supply chain and key technology platforms into the U.S. to support our strong U.S. growth outlook,” said Vas Narasimhan, CEO of Novartis. “These investments also reflect the pro-innovation policy and regulatory environment in the U.S. that supports our ability to find the next medical breakthroughs for patients.”

Tim Scott, president and CEO of Biocom California, the San Diego-based life science trade group, said the company’s investment in the local community is “incredibly exciting.”

“It’s a testament to the strength of the life science industry throughout California broadly and specifically in San Diego,” Scott said in an email. “The local talent pool is unmatched, and San Diego’s highly collaborative life science community enables cross pollination that fosters further innovation. In addition, our local builders know how to construct quality facilities that meet the exact needs of life science companies.”

San Diego has a history of attracting big pharmaceutical companies to its science core near Torrey Pines, Sorrento Mesa and Carmel Valley. Firms such as Pfizer and Eli Lilly set up research and development campuses in close proximity to San Diego’s cluster of world-renowned scientists, institutes and universities for access to talent and new innovations.

Mark Cafferty, CEO of the San Diego Regional Economic Development Corp., thought there might be some effort in the works for Novartis to reinvest in San Diego. But the news of its plans for a billion-dollar research hub came as a welcome surprise.

“Even in hearing rumors and remaining hopeful that San Diego might see new and continued investment from Novartis, the company’s announcement today came as a very pleasant surprise in both the scale of the investment and the clear emphasis on research and innovation within the region,” Cafferty said.

And while it’s only speculation on his part, Cafferty suspects that the plans to bring a new research facility to San Diego were hastened by continuing efforts by the Trump administration to initiate steep, worldwide tariffs.

“I wouldn’t be surprised if a lot of what’s happening at the federal level is what’s driving them to make the decision, and all of that bodes really well for San Diego, because research is really what has driven the growth of biotech and life sciences in San Diego for a long time,” Cafferty said.

Not only will the new facility lead to job creation for Novartis, but it should have a ripple effect beyond just that company, Cafferty suspects.

“It’ll mean new jobs in the actual facilities where the research is being done,” he said. “But because of the very nature of the work, new jobs will continue to spin out from that through small businesses in the community that support those biotech companies and those research institutions.”

Additionally, Novartis plans to build four new manufacturing facilities in yet-to-be-determined states and two manufacturing sites in Texas and Florida. It will also expand sites in Carlsbad, Indiana and New Jersey that focus on radioligand therapy manufacturing, a type of precision cancer treatment that delivers radiation to targeted cells.

Novartis previously stated that it was investing more than $40 million in the Carlsbad facility, which will be 10,000 square feet and create more than 30 local jobs.

The company’s San Diego County locations also include the Sorrento Valley site of DTx Pharma — a biotech it acquired in 2023 — a laboratory in Carlsbad and the Genomics Institute of the Novartis Research Foundation in Torrey Pines.

In July, Novartis announced plans to close one of its San Diego research sites on Campus Point Drive by mid-2025 as part of a broader restructuring of its drug development segment.

At the time, a Novartis spokesperson said that although that facility was shutting down, the company would continue to have a research presence in San Diego “with a team of approximately 580 associates.”

Novartis said in its 2024 annual report that it employed 75,883 people and recorded about $11.9 billion in profits, as of Dec. 31.

(San Diego Union-Tribune staff writer Lori Weisberg contributed to this report.)

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