Lonza has agreed to acquire Genentech’s large-scale biologics production facility in Vacaville, California, from Genentech’s parent company, Roche, for $1. 2 billion, the companies said, as part of a deal to specifically develop the buyer’s ability to manufacture biologics at commercial scale.
With a total bioreactor capacity of approximately 330,000 liters, in reactor sizes of 12,000 and 25,000, the Vacaville plant is among the largest biologics production sites in the world in terms of volume. That capacity will increase in the coming years, Lonza said, as it plans to invest about 500 million francs ($556. 6 million) to upgrade the Vacaville plant, an investment aimed at its ability to meet demand for next-generation mammalian biotherapies.
During the upgrade, Lonza will manufacture what exists for Roche at a committed volume of 30% of its capacity by 2025. These volumes will be minimized in the medium term, Lonza said.
Roche inherited Vacaville in 2009, when it completed the $46. 8 billion acquisition of Genentech, which built the facility and put it online in 2000.
Since then, Lonza said in a presentation to analysts, nine families of advertising products have been manufactured in Vacaville, adding the COVID-19 antibody “cocktail” or casirivimab and imdevimab combination remedy that Roche developed with Regeneron Pharmaceuticals during the COVID-19 pandemic. It was advertised as REGEN-COV™ in the U. S. U. S. and Ronapreve™ outside the U. S. It is not legal according to the FDA following the surge in cases of the Omicron variant of COVID-19.
The presentation by Lonza’s senior executives presented the rationale for the deal: Lonza expects CDMOs to own more than a share of the expected market share of installed mammalian drug production capacity through 2028: 52% vs. 48% for pharmaceutical companies, vs. 39% for pharmaceuticals. . CDMO and 61% for the pharmaceutical industry last year.
The percentage of installed capacity of mammalian CDMOs increased from 25% in 2013 to 29% in 2018, while pharmaceutical capacity declined from 75% in 2013 to 71% five years later, according to data cited by Lonza from an internal corporate analysis. knowledge of IQVIA, EvaluatePharma, Citeline and capacity expansions publicly announced last year.
Lonza said it would offer employment to Genentech’s roughly 750 employees at the plant.
“Looking ahead, we are excited about the continued expansion and innovation that Lonza will bring to Vacaville,” Vacaville Mayor John Carli said in a Facebook post. “While we bid farewell to Genentech, we are grateful for their significant contributions going forward. 25 years old. The medicines produced at Vacaville services have impacted countless lives around the world and we are proud to have been a part of this journey.
Lonza said the acquisition would better meet demand for contract production of mammals by consumers with existing advertising products, as well as those whose molecules are being converted into advertising products.
The Vacaville plant will also create a significant advertising presence for Lonza on the U. S. West Coast. It is based in the U. S. , complementing the company’s existing biologics on the East Coast in Portsmouth, New Hampshire, as well as its overseas service network in Europe and Asia.
“The Vacaville site is a high-value strategic acquisition that will make capacity available to our consumers without delay and unlock long-term expansion for our Biologics division,” Jean-Christophe Hyvert, president of Lonza’s Biologics division, said in a statement. “This will help us offer a go-to-market pathway to existing consumers and greater large-scale commercial capability to our partners. “
Products now manufactured through Roche will be supplied through Lonza, with volumes committed in the medium term, which will be phased out as the transition is made to serve other customers.
As a result of the agreement with Vacaville, Lonza has updated its medium-term guidance for 2024-2028 by expanding its projected sales expansion diversity from a compound annual expansion rate (CAGR) of 11-13% to between 12% and 15%. Constant exchange rates (CERs). Lonza closed 2023 with a profit of 655 million francs ($729 million) on a cash inflow of 6,717 million francs ($7,479 million), up 7. 9% (10. 9% according to CER) from 6,223 million francs ($6,929 million).
Profits fell 46% from CHF1. 218 billion ($1. 356 billion) in 2022, largely due to about CHF500 million ($556. 6 million) in sales effects and closing prices resulting from Moderna’s relief in the production of the mRNA drug substance for its COVID-19 vaccine. in Visp, Switzerland, he announced it in September.
The deal is expected to close in the second half of this year, subject to standard final terms. Upon completion, Lonza will integrate Vacaville into its Biologics division, joining a network of existing mammal productions in Portsmouth and Visp, as well as Slough. , United Kingdom, Singapore and Porriño, Spain.
“We have deep and long-standing industry experience in supplying commercial-scale production for our customers’ therapies. Combining this with the strong legacy of the Vacaville facility, its network of highly professional colleagues and its proven track record of quality, we are excited to take our leading large-scale mammal supplier to its next stage of growth. “
The acquisition comes at a time of upheaval for organizations and contract production (CDMO).
Last month, Catalent found a client when Novo Holdings, the discovery asset manager that controls Novo Nordisk, agreed to acquire the company for $16. 5 billion. Novo Holdings is expected to recoup two-thirds of that expense through the sale of three of Catalent’s fill-and-fill operations. Finish the sites for Novo Nordisk for $11 billion upfront to meet developing demand for its hit anti-obesity drug, Wegovy®, and its diabetes drug, Ozempic®.
And in Congress, the U. S. House Select Committee on Strategic Competition, consisting of U. S. -China Communist Party Chairman Mike Gallagher (R-WI) and member Raja Krishnamoorthi (D-IL), have come together to introduce the BIOSECURE Act (H. R. 7085). ).
The measure would allow the awarding of federal contracts (adding the procurement of drugs for Medicare and Medicaid) to “foreign biotechnology corporations detrimental to the national security of the United States. “Among the Chinese corporations mentioned in the bill are two CDMOs, WuXi Apptec and WuXi Biologics. .
WuXi AppTec denied posing a risk to U. S. security. WuXi Biologics issued a challenge to the bill’s description of CEO Chris Chen’s background.