The facility will produce small quantities of candidate drugs for clinical trials, creating around 100 jobs when it becomes operational at the end of 2009.
It will be built on the 28-acre vacant lot adjacent to Pfizer's existing Ringaskiddy manufacturing unit that has been the subject of much speculation since the firm applied for planning permission last summer.
Pfizer spokeswoman Tara Delaney told in-PharmaTechnologist.com that the unit will " manufacture and purify a variety of mammalian cell derived proteins at pilot scale on behalf of PGR&D
[Pfizer Global Research and Development] ," She went on to say that Jacobs Engineering will manage the construction project but added that it was too early to discuss the specific facilities that will be available at the site.
The investment is in marked contrast with Pfizer's ongoing programme of cost cutting and restructuring which, as recently as last month, saw chief financial officer Frank D'Amelio announce plans to reduce its number of production facilities to 44 by the end of 2009.
Additionally, the plant is a further indication that Pfizer is looking to biologics to bolster its portfolio ahead of the impending loss of patent protection for some of its highest earning products.
In recent years, the firm has developed its biotechnology arm with the acquisition of a number of specialists, including ConvX and PowderMed, in 2006 and 2007.
Nat Ricciardi, Pfizer Global Manufacturing, said that: " Pfizer is positioning itself to become a global leader in biologics.
We have been implementing an aggressive strategy to grow our biologics portfolio seeking candidates in many therapeutic areas - of the 14 major product deals entered by Pfizer in 2007, six were biotherapeutic transactions ."
The Irish biotechnology sector will also be reassured by Pfizer's move following the firm's sale of facilities in Little Island and Loughbeg, County Cork, in 2007.
Ireland's minister for trade, employment and enterprise, Micheal Martin, said that the plans were a " further demonstration of Pfizer's continuous high level commitment to Ireland and is another significant vote of confidence in Ireland's wealth of talent to support investment of this calibre ." Ireland's tax system has long been an attractive proposition for major drug and biotechnology firms.
Last month for example, GlaxoSmithKline said it would invest a further €30m in its over-the-counter (OTC) facility in Dungarvan, while Genzyme said it would put another €130m into its plant in County Waterford.
More recently Shire announced plans to relocate its tax residencey to Ireland to help reduce costs.
Delaney explained that " Ireland was selected for this new facility because of the favourable business environment, an experienced biotechnology talent pool, ongoing government support for this technology, and close proximity to the Dublin drug product plant where mammalian cell products will be formulated ."
Delaney added that: " the Shanbally biotechnology facility is based on different equipment, technology, skills and scale that cannot be found in other existing Pfizer manufacturing sites in Ireland ."