CDMOs/CMOs: The Movers and Shakers of 2022By
As 2022 comes to a close, what were the largest mergers and acquisitions and expansions made by CDMOs/CMOs in 2022? DCAT Value Chain Insights looks at which companies topped the headlines this year and the leading moves they made.
CDMOs/CMOs: The key moves in 2022
This year (2022) was again a busy year for CDMOs/CMOs. In looking at investment activity (both manufacturing expansions and mergers and acquisitions), biomanufacturing continues to be a major area of focus, with several multi-billion dollar expansions announced or progressing. Also, 2022 saw the emergence of several new CDMOs, both large and small, and several CDMOs made large-scale acquisitions. Although not possible to chronicle all activity from 2022, this roundup, as outlined below, points to some of the most noteworthy and interesting moves from 2022.
Catalent’s $475-million acquisition of Metrics Contract Services. One of the noteworthy acquisitions in 2022 was Catalent’s $475-million acquisition of Metrics Contract Services, a Greenville, North Carolina-based CDMO of oral solid dosage products, including high-potency products. Metrics, part of Mayne Pharma, an Adelaide, Australia-based bio/pharmaceutical company, has a 333,000-square-foot facility in Greenville, North Carolina. The facility includes 16 manufacturing suites, with 11 designed to handle highly potent compounds, and two packaging lines. The facility’s estimated annual production capacity exceeds one billion oral solid dose units. With the acquisition, Metrics’ team of over 400 employees joins Catalent.
Euroapi launches as a small-molecule API CDMO spun off from Sanofi. Another interesting move in 2022 was the launch of Euroapi, a CDMO of small-molecule active pharmaceutical ingredients (APIs) spun off from Sanofi as a stand-alone publicly traded company. Sanofi says it expects the new manufacturing company to bring in EUR 1 billion ($1.05 billion) in sales in 2022 and that the stand-alone CDMO will rank number one in small-molecule APIs in Europe and number two in the global API market. The company began trading on the Euronext Paris stock exchange in early May (May 2022).
Sanofi had announced its plan to form the stand-alone CDMO in February 2020. The new company combines Sanofi’s API commercial and development activities from six of its European production sites: Brindisi, Italy; Frankfurt, Germany; Haverhill, UK; St. Aubin les Elbeuf, France; Vertolaye, France; and Újpest, Hungary. Euroapi has a portfolio of approximately 200 APIs over the six sites. In 2021, the business posted net sales of EUR 892.8 million ($941.7 million). Karl Rotthier, formerly CEO of Centrient Pharmaceuticals, a Rotterdam, the Netherlands-based manufacturer of intermediates and APIs, was named as CEO of Euroapi, effective January 2021.
Euroapi launched with financial backing from Sanofi. Sanofi established a long-term customer relationship with Euroapi and committed to holding a minority stake of approximately 30% in the CDMO for a two-year lock-up period (as reported in May 2022). In addition, EPIC Bpifrance, a French public investment bank owned by the French government, agreed to purchase 12% of EuroAPI’s shares from Sanofi and committed to a two-year lock-up period, and L’Oréal, Sanofi’s largest shareholder, committed to a one-year lock-up period (as reported in May 2022).
When first announcing the launch of the new CDMO in 2020, Sanofi said that the new European company will help balance “the industry’s heavy reliance on API sourced from other regions” while simplifying Sanofi’s industrial footprint. At the end of 2021, Sanofi conducted industrial production at 67 sites in 31 countries. As of December 31, 2021, Euroapi represented approximately 1% of the total consolidated assets of Sanofi, mainly in the form of dedicated industrial facilities at the chemicals sites included in the spin-off and API inventories manufactured and commercialized by Euroapi.
Fujifilm Diosynth Biotechnologies progresses multi-billion dollar biomanufacturing expansions. Fujifilm Diosynth Biotechnologies, a biologics CDMO, announced several large-scale biomanufacturing expansions in 2022. In June (June 2022), the company announced an investment of $1.6 billion to expand manufacturing at its sites in Hillerød, Denmark, and College Station, Texas. The company is expanding to support large-scale cGMP fed-batch production by adding 8 x 20,000-L bioreactors and two downstream processing streams in its Hillerød, Denmark, facility to provide a total of 20 x 20,000-L bioreactors for drug-substance production as well as drug-product and finished goods services. Fujifilm Diosynth acquired the facility from Biogen in 2019 for approximately $890 million. The company expansion in Denmark is slated to be completed in the summer of 2026.
Also in 2022, Fujifilm Diosynth broke ground on a $300-million expansion of its manufacturing campus in College Station, Texas, to add a new production facility that will double the company’s advanced therapy and vaccine manufacturing capacity in the US. This new facility, expected to be operational by 2024, will add approximately 138,000 square feet to the existing campus, and grow the site to 300,000 square feet.
These expansions are in addition to other key investments by the company. Last year (2021), Fujifilm Diosynth Biotechnologies broke ground on a new, $2-billion, large-scale cell-culture biomanufacturing facility in Holly Springs, North Carolina. The facility is expected to be operational by the spring of 2025. In addition, in December 2021, the company announced plans to invest £400 million ($533 million) to expand its site in Billingham, Teesside, UK, with the addition of a viral gene-therapy facility and a mammalian cell-culture facility. The new facilities are expected to be operational by late 2023. The investment is part of a JPY 90 billion ($797 million) global capital investment package initially outlined by the company in June 2021. In addition to the gene-therapy and cell-culture manufacturing expansion in the UK, the investment includes doubling cell-culture production for recombinant vaccines in the US and doubling microbial fermentation capacity at an existing UK facility.
Samsung Biologics’ new $1.7-billion biomanufacturing facility and plans for a second bio complex. One of the largest expansions by CDMOs/CMOs is Samsung Biologics’ KWR 2-trillion ($1.7-billion) investment for a new biomanufacturing plant, the company’s fourth, in Incheon, South Korea, and for a second bio complex. The company broke ground on the new facility in November 2020 and began partial operations in October (October 2022). The plant will have a total capacity of 240,000 liters when it becomes fully completed in the first half of next year (2023).
Upon the full completion of the plant, Samsung Biologics will have a total production capacity of 604,000 liters at its first campus in Incheon, South Korea. In 2022, the company also acquired additional land for a second campus in the Songdo Industrial Cluster in Incheon, South Korea. which will house four biomanufacturing plants and an innovation center. Construction is set to begin later this year (2022). The second campus is 30% larger in size compared to the first campus.
Also, in January 2022, Samsung Biologics, announced plans to start construction of a new manufacturing facility for multi-modal products, including cell and gene therapies and vaccines using messenger RNA (mRNA), plasmid DNA (pDNA), and viral vectors, all at a single site. This facility will be in addition to the mRNA vaccine drug-substance manufacturing suite the company added to its existing facility in Songdo, South Korea.
WuXi Biologics announces $1.4-billion expansion plan. In July (July 2022), WuXi Biologics announced a 10-year, $1.4 billion investment plan to expand the company’s research, development, and large-scale drug-substance and drug-product manufacturing capacity and capabilities in Singapore. This new site will add 120,000 L of biomanufacturing capacity to WuXi Biologics’ global network by 2026 and is anticipated to employ 1,500 research, development and manufacturing staff when complete.
Also in 2022, WuXi Biologics launched its GMP Phase I drug-substance clinical manufacturing facility in Cranbury, New Jersey. The site’s clinical manufacturing operations have an initial capacity of 4,000 L and can expand to 6,000 L, using only single-use technology. It is WuXi Bio’s first GMP manufacturing facility in North America. In addition, earlier this year (2022), the company extended its capabilities to include development and cGMP manufacturing for microbial-derived products at its site in Hangzhou, China.
WuXi STA progresses major expansion plan. WuXi STA, a CDMO of drug substances and drug products and a subsidiary of WuXi AppTec, is proceeding with a major expansion plan in its global R&D and manufacturing network for small-molecule APIs, oligonucleotides, peptides, and their conjugates, as well as in its drug-product manufacturing operations.
Within the company’s existing facilities, its expansion plans for its API business in 2022 were focused at its Changzhou and Shanghai Jinshan sites in China, and at its site in Wuxi City, China, for its drug-product operations. WuXi STA’s Changzhou site is an integrated API process R&D and manufacturing site. In the first quarter of 2022, WuXi STA opened a new R&D center that can accommodate 950 scientists and two new plants with a total reactor volume (TRV) of 360 m3 with plans to open four more plants with a TRV of 635 m3. By the end of 2022, the Changzhou site will occupy 74 acres, consisting of two R&D centers and 15 plants with a total TRV of 1,927 m3.
Flow chemistry (i.e., continuous manufacturing) and biocatalysis are two key technology platforms for the company’s API business, and the company is expanding in these areas. In 2022, it opened a new continuous manufacturing (flow chemistry) plant at its Changzhou campus in China for large-scale API and advanced intermediate production. The new plant features 11 continuous production lines to support 20 types of reactions. With the opening of the new plant, WuXi STA now has multiple flow chemistry R&D labs and 25 continuous manufacturing lines in Shanghai Waigaoqiao, Shanghai Jinshan, and Changzhou sites in China.
In biocatalyis, WuXi STA’s technology platform covers a one-stop process from enzyme engineering, enzyme screening, enzyme production, biocatalytic process development and production. In 2021, it successfully developed more than 50 biocatalytic processes and delivered more than 80 metric tons of APIs and intermediates. In January 2022, the company began the operation of two new 2,000-L fermenters for enzyme production to reach total fermenter capacity of 5,500 L.
The company is also expanding production capacity for its new modality platform (oligonucleotides, peptides, and their conjugates). In 2022, WuXi STA opened a new large-scale oligonucleotide and peptide manufacturing facility at its Changzhou campus. The 30,570-square-foot oligonucleotide facility has four large-scale oligonucleotide production lines and more than 20 small- to mid-scale production lines. A new 22,260-square-foot peptide plant features three new production lines with reactors that can accommodate up to 1,000 L, increasing WuXi STA’s overall solid-phase peptide synthesis total reactor volume to 6,490 L.
High-potency APIs (HPAPIs) represent another area of growth as a small-molecule therapeutic and in conjugation with oligos, peptides, or antibodies. In 2022, the company opened a high-potency active pharmaceutical ingredient (HPAPI) plant at its site in Changzhou,, China. WuXi STA has two sites located in Shanghai Jinshan and Changzhou, China to support the process development and manufacture of HPAPIs. In addition to HPAPIs, the Changzhou site provides process development and manufacturing for linkers, oligonucleotides, and peptides.
On the drug-product side, last month (November 2022) began operation of a new parenteral formulation manufacturing line at its drug-product site in Wuxi City, Jiangsu Province, China. It is the second line opened by WuXi STA this year (2022) for parenteral drug-product clinical and commercial manufacturing and has annual capacity of 10 million units. In addition, the company is slated to open a new high-potency sterile parenteral production plant in the third quarter of 2023 at its Wuxi City site. Also, the company opened a new sterile lipid nanoparticle formulation facility in Wuxi City in 2022. In addition, injectable formulation development and manufacturing services will be available from the company’s new site at Middletown Delaware in 2025. In August (August 2022), the company broke ground of its new pharmaceutical manufacturing campus in Middletown, Delaware, which will provide formulation development and clinical and commercial drug-product manufacturing for oral and injectable dosage forms, as well as packaging, labeling, storage and distribution services for clinical trial materials and commercial drug products. The site will be WuXi STA’s second facility in the US.
WuXi STA also is expanding its oral drug-product platform at its site in Wuxi City by providing more tablet and capsule capacity. In 2022, the company opened its first high-potency oral drug-product manufacturing facility at its Wuxi City campus and is adding a continuous tablet manufacturing platform. Last year (2021), WuXi STA established its first Europe-based drug-product manufacturing facility in Couvet, Switzerland, which provides tablet and capsule commercial manufacturing and packaging capabilities.
MilliporeSigma reorganizes its CDMO business under new operating model, completes major acquisition. Earlier this year (2022), Merck KGaA, the parent company of MilliporeSigma, completed its $780-million acquisition of Exelead, a bio/pharmaceutical CDMO that specializes in complex injectable formulations, including lipid nanoparticle-based drug-delivery technology. The business combination enables MilliporeSigma to provide end-to-end CDMO services across the mRNA value chain. Merck KGaA plans to further invest over EUR 500 million ($567 million) to scale up Exelead’s technology over the next 10 years (as reported on February 23, 2022).
In April (April 2022), Merck KGaA launched several organizational changes and a new operating model for its life-sciences businesses. Effective April 1, 2022, existing CDMO and contract testing services were consolidated into one global organization, Life Science Services, for traditional modalities, such as monoclonal antibodies and HPAPIs and novel modalities, such as antibody drug conjugates and viral and gene therapies, along with the respective sales and marketing, R&D, manufacturing, and supply-chain operations. Its non-CDMO activities under the new operating model include its Process Solutions business unit and the Science and Lab Solutions business unit. The Process Solutions business unit provides filtration devices, chromatography resins, single-use assemblies and systems, processing chemicals, and excipients. The Science and Lab Solutions business combines the research solutions and applied solutions business units into one organization.
CordenPharma in growth mode, change of ownership. CordenPharma, a CDMO of APIs and drug products, announced a change of ownership in May (May 2022), reporting that the European private-equity firm, Astorg, was acquiring the company, from International Chemical Investors Group (ICIG), an investment company with holdings in fine chemicals and chemicals. CordenPharma has more than 250 pharma and biotech customers across five technology platforms: peptides; lipids & carbohydrates, including lipids for mRNA vaccines and therapeutics; highly potent & oncology; injectables; and small molecules.
CordenPharma added to its drug-product manufacturing capabilities earlier this year (2022) with the acquisition of three facilities from Vifor Pharma, a Saint Gallen, Switzerland-headquartered specialty pharmaceutical company. CordenPharma first announced the acquisition last December (December 2021) and completed the acquisition in March (March 2022). The acquisition of the facilities, two facilities in Switzerland (Ettingen and Fribourg) and one in Portugal (Amadaro), expanded CordenPharma’s capabilities and capacities in the manufacturing of non-sterile drug-product dosage forms, including but not limited to, oral solid-dosage forms such as tablets and capsules. With the addition of these three new facilities, CordenPharma’s global network now consists of 12 locations (11 GMP manufacturing sites and 1 R&D laboratory).
The acquisition of the three Vifor Pharma manufacturing sites is one part of CordenPharma’s larger growth plans as the company targets EUR 1 billion ($1.1 billion) in sales in the coming years. The bolt-on acquisition complements CordenPharma’s strategic expansion investment of EUR 100 ($110) million per year over two years to increase manufacturing capacity at facilities in CordenPharma Frankfurt (Germany), Chenôve (France), and Plankstadt (Germany) as well as new service offerings at CordenPharma Chenôve (France) and Caponago (Italy).
Resilience raises more capital and acquires more facilities. National Resilience Inc., a CDMO of biologics and advanced therapies, continues its growth strategy by raising capital and making several facility acquisitions in 2022. In (June 2022), the company announced that it had raised $625 million, which is in addition to a previously $600 million raised in August 2021. The CDMO has raised $2 billion since its founding in 2020.
In it latest facility acquisition, Resilience announced in late November (November 2022) that it had reached an agreement to acquire AstraZeneca’s 580,000-square-foot drug-product manufacturing facility in West Chester, Ohio. The commercial-scale facility is equipped with aseptic filling, inspection, packaging, labeling, and cold-chain operations for vials, cartridges, pre-filled syringes, and autoinjectors. In addition to acquiring the facility, Resilience will manufacture select AstraZeneca medicines at the facility as part of a multi-year supply agreement. The companies anticipate completing the transaction in early 2023.
Resilience focuses on five therapeutic modalities—biologics, vaccines, nucleic acids, and cell and gene therapies. Key recently completed projects or projects underway include: (1) the acquisition of bluebird bio’s manufacturing facility in Research Triangle, North Carolina; (2) the addition of capacity and capabilities for biologics and vaccines, including drug-substance and drug-product manufacturing expansions coming on line in 2022 across sites in Alachua, Florida; Boston; and Toronto; (3) construction of a new facility in Marlborough, Massachusetts, to support vaccines and gene therapies, coming on line in 2023; (4) the addition of a new cell- and gene-therapy process and analytical development and drug-substance manufacturing site in the Philadelphia area; and (5) the launch of a joint venture with the University of Texas MD Anderson Cancer Center, the Cell Therapy Manufacturing Center, to accelerate the development and manufacturing of cell therapies for cancer. The Cell Therapy Manufacturing Center will be based in a 60,000-square-foot manufacturing facility in the Texas Medical Center, with a team of 70 employees focused on process and analytical development as well as early-phase and clinical-stage GMP manufacturing.
Novasep, PharmaZell Merge To Create New CDMO, Axplora. This year (2022) also saw the completion of the merger of two CDMOs: Novasep, a Lyon, France-based CDMO of APIs, intermediates, and antibody drug conjugates, and PharmaZell, a Raubling, Germany-based CDMO of small-molecule APIs. The companies announced the completion of the merger in April (April 2022) and rolled out the new name of the combined CDMO, Axplora, in October (October 2022). The combined company also includes Farmabios, part of PharmaZell, a Gropello Cairoli, Pavia, Italy-based manufacturer of non-sterile and sterile steroids and a CDMO of APIs and intermediates, including high-potency APIs. The combined company has a footprint in Europe, the US, and India with 11 production and R&D sites: eight in Europe (France, Germany, and Italy), two in India, and one in the US.
Recipharm enters the biologics/advanced therapy space. Growth in biologics is also leading certain CDMOs to enter that space. lLed by CEO Marc Funk, formerly CEO of Lonza, who took over as CEO of Recipharm in 2021e, Recipharm, a CDMO of drug substances and drug products, is increasing its position in biologics, with a particular focus on drug-substance manufacturing of advanced therapy medicinal products.
In April (April 2022), Recipharm completed the acquisitions of Vibalogics, a CDMO of oncolytic viruses, viral vector vaccines, and viral vectors, and Arranta Bio, a CDMO of live biotherapeutic products and products of the human microbiome. Recipharm had announced the acquisitions in February (February 2022). Vibalogics is a manufacturer of oncolytic viruses, viral vaccines and gene therapies and provides process and analytical development, manufacturing, testing, and fill–finish services from facilities in Cuxhaven, Germany, and Boxborough, Massachusetts. Arranta Bio completed the first build-out phase of laboratory and GMP capacity at a second commercial-ready site in Boxborough, Massachusetts, in mid-2022. In addition, earlier this year (February 2022), Recipharm acquired GenIbet, an Oeiras, Portugal-based biologics CDMO of recombinant proteins, cell and gene therapies, RNA, live microbial products, and vaccines. GenIbet was founded in 2006 as a spin-off of iBet Instituto de Biologia Experimental e Tecnológica, a private organization specializing in biotechnology research and bioprocess development.
The company’s move into biologics comes as it cuts back on small-molecule API capacity. In January 2022, Recipharm divested the former Aesica Pharmaceuticals’ small-molecule API manufacturing facility in Cramlington, UK, near Newcastle, UK, to Pharmaron, a Beijing-based R&D service provider for the life-sciences industry. Recipharm acquired Consort Medical, the parent company of Aesica, a CDMO of APIs and drug products, and Bespak, a CDMO of drug devices, for £505 million ($629 million) in 2020 and with it, Aesica’s API manufacturing facility in Cramlington, UK.
Pharmira Launches as Shionogi-backed CDMO. Although on a small scale, another interesting move in 2022 was the launch of a new CDMO of small-molecule APIs with a focus on continuous manufacturing, Pharmira. Pharmira is a joint venture (JV) held by Shionogi Pharma, the CDMO business of Shionogi Pharma, an Osaka, Japan-based bio/pharmaceutical company, and Fujimoto Chemicals Co., an Osaka, Japan-based manufacturer of APIs and intermediates, along with five other Japanese companies. The companies established the JV in November 2021 and began the business on April 1, 2022.
Shionogi Pharma is the principal stakeholder with a 50.1% stake, and Fujimoto Chemicals holds a 10.0% stake. The other five companies in the JV are involved in facility construction and operations and are: Chiyoda Corporation, a Kanagawa, Japan-based engineering and construction company (17.0% stake); Taisei Corporation, a Tokyo-based an engineering and construction company (15.9% stake); Takenaka Corporation, an Osaka, Japan-based general contractor (5.3% stake); Yokogawa Electric, a Tokyo, based provider of advanced technologies and products for measurement, control, and information support (1.1% stake); and Nagase & Co., a Tokyo-based importer/exporter of chemical products (0.7% stake).
Continuous manufacturing is a specialty focus of the CDMO JV, which will use both batch and continuous manufacturing and provide process development and manufacturing on a clinical and commercial scale. Upon its introduction, continuous manufacturing will be applied mainly to reaction and crystallization processes.
SPAC eureKING targets European biologics CMDO market. A small, but interesting move in 2022 was the emergence of a special purpose acquisition companies (SPACs) to the CDMO space. Private investors, through private-equity firms, have long been a part of the CDMO sector, but SPACs are relatively newer to the sector. A SPAC is a company that has no commercial operations and is formed strictly to raise capital through an initial public offering (IPO) or for the purpose of acquiring or merging with an existing company. As an investment vehicle, SPACs are not new, but their popularity has soared in recent years. A new entry in the CDMO sector is eureKING, a SPAC focused on investing in biologic-based CDMOs, mainly in Europe. eureKING launched an IPO in May (May 2022) on Euronext Paris with the aim of raising EUR 150 million ($158 million).
eureKING was founded in March 2022 by eureKARE, an investment firm focused on financing and building companies in the fields of synthetic biology and the microbiome, Its founders include seven industry executives, including its CEO, Michael Kloss, former Chairman and CEO of Panasonic Healthcare and former Chairman and CEO of Ascencia Diabetes Care (formerly part of Bayer), and Gérard Le Fur, Chairman, eureKING, and former CEO of Sanofi-Aventis. Also, among the others founders is Christophe Jean, Strategic Partner of the private equity fund, Oraxys Environment, who held several executive positions in Novartis, Ipsen, and Pierre Fabre.
eureKING’s plan is to invest in biologics CDMOs in three main areas: (1) the production of biologics, in particular new generations of monoclonal antibodies or complex proteins; (2) the production of cell and gene therapies; and (3) the production of live biotherapeutics (with applications in the microbiome). eureKING says it will seek to invest in biopharmaceutical CDMOs that can offer a variety of services across the biopharmaceutical value chain, including drug-product development (e.g., sourcing and specimen manufacturing), drug-substance manufacturing (e.g., extraction and synthesis) and drug-product manufacturing (e.g., formulation and commercial production). In deciding to target the biologics CDMO sector, eureKING cites the fragmented nature of the biologics CDMOs market, noting that large players occupy only about 27% of the market, and the opportunity to target other CDMOs, noting that the CDMO market consists of thousands of companies, two-thirds of which have revenues of less than $50 million.