CDMOs/CMOs: The Movers and Shakers of 2023
As 2023 comes to a close, what were the largest mergers and acquisitions and expansions made by CDMOs/CMOs in 2023? DCAT Value Chain Insights looks at which companies topped the headlines this year and the leading moves they made.
This year (2023) was again a busy one 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, several important moves in the drug-product space were made in 2023. A niche, but growing area of manufacturing expansions by CDMOs/CMOs in 2023 was in peptides and oligonucleotides, with several companies announcing expansions. Also, 2023 saw the launch of several new CDMOs. Although not possible to chronicle all activity from 2023, this roundup, as outlined below, points to some of the most noteworthy and interesting moves from 2023.
Baxter’s $4.24-billion divesture of its CDMO business, Baxter BioPharma Solutions, to form Simtra BioPharma Solutions. The largest deal in 2023 was the $4.25-billion sale by Baxter International, a medical technology and healthcare company, of its CDMO business, Baxter BioPharma Solutions, a CDMO of sterile injectables, to two private-equity firms: Advent International and Warburg Pincus. The move was part of a larger strategic plan by Baxter, which announced a series of actions in January (January 2023) to improve the company’s financial performance, which included evaluating strategic alternatives for its CDMO business. The deal was completed in October 2023, and the CDMO was renamed as Simtra BioPharma Solutions. The CDMO provides contract services for formulation development, sterile manufacturing, and lyophilization and parenteral delivery systems and operates facilities in Bloomington, Indiana, and Halle, Germany. Franco Negron, formerly President of Commercial Operations at Thermo Fisher Scientific and President of Development and Commercial, North America at Patheon, and most recently CEO of ApiJect Systems America, was named CEO of Simtra BioPharma Solutions in August (August 2023).
Samsung Biologics advances fifth biomanufacturing plant. Earlier this year (2023), Samsung Biologics, a contract biologics manufacturer, updated its timeline for its fifth biomanufacturing plant, which is to be constructed at its second Bio Campus in Songdo, South Korea. The company is investing over KRW 1.9 trillion ($1.46 billion) in the new facility, which is scheduled to be operational in April 2025. Upon completion, the new facility will have production capacity of 180,000 liters to provide the company with overall biomanufacturing capacity of 784,000 liters. Samsung Biologics purchased 357,360 m2 of land in July 2022 for its Second Bio Campus, which will feature an Open Innovation Center for biotech incubation and four biomanufacturing plants with total capacity of 720,000 liters. Upon the completion of all plants at the company’s second Bio Campus, along with its existing facilities at its first Bio Campus, the company will hold total biomanufacturing capacity of 1.324 million liters (as reported in June 2023).
Lotte Biologics’ $3-billion expansion plan. Earlier this year (2023), Lotte Biologics, a recently established CDMO of biologics, announced an investment of $3 billion to construct three biomanufacturing plants in South Korea. Lotte Biologics entered the CDMO market with the acquisition of a commercial-scale biomanufacturing facility in Syracuse, New York, from Bristol-Myers Squibb in January (January 2023). Lotte Biologics is part of Lotte Corporation, a Seoul, Korea-based holding company with holdings in chemicals, food & beverage, retail, and hotels & services. The Syracuse facility will serve as the Lotte Center for North America Operations for Lotte’s biologics CDMO business in the US. Lotte acquired the Syracuse site’s operations and assets, which include the property, plant and equipment, and workforce.
In October (October 2023), the company signed a land purchase agreement with the Incheon Free Economic Zone Authority for the establishment of a biomanufacturing site in Songdo, South Korea. The company plans to construct three biomanufacturing plants with a total antibody drug production capacity of 360,000 liters, with each plant capable of producing 120,000 liters of antibody drugs. Plants 1, 2, and 3 are expected to be completed in 2025, 2027, and 2030, respectively, with full-scale operations to begin by 2034, bringing the company’s total production capacity to 400,000 liters. The groundbreaking for Plant 1 is planned for the first quarter of 2024, with completion scheduled for the end of 2025. The company says it is also considering the addition of small-scale bioreactors for clinical material production and drug-product facilities.
Fujifilm Diosynth Biotechnologies’ multi-billion biomanufacturing expansions. Fujifilm Diosynth Biotechnologies is advancing a $2-billion investment for a large-scale cell-culture biomanufacturing facility in Holly Springs, North Carolina. Last month (November 2023), the company updated its expansion plan at the site, which includes two large-scale manufacturing suites with 4 x 20,000-L bioreactors each. The nearly 1,000,000-square-foot manufacturing site is being built with the flexibility to expand with additional 24 x 20,000-L bioreactors to accommodate new projects. Once completed, the site will provide drug-substance manufacturing, automated fill–finish and assembly, and packaging. The facility is expected to be operational in 2025.
The company is also investing a combined $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 is also adding a new cGMP production facility at its site in College Station, Texas, which will be operational by 2024, and which will double the company’s advanced therapy and vaccine manufacturing capacity in the US.
Earlier this month (December 2023), the company announced an expansion of its cell-therapy manufacturing site in Thousand Oaks, California, with the addition of a new development lab and two new independent manufacturing cleanrooms. The added capacity is slated to be operational in early 2025.
In April (April 2023), Fujifilm Diosynth Biotechnologies announced that it had acquired 41 acres of land adjacent to its existing biomanufacturing campus in Research Triangle Park (RTP), North Carolina, to bring the total campus size to just under 119 acres to provide the company room to grow for future capacity for manufacturing and development of biologics. The company’s RTP campus is comprised of three main buildings, which include: over 170,000 square feet dedicated to GMP manufacturing of biologics; 151,000 square feet of process and analytical development laboratories, of which 89,000 square feet is part of a current expansion; and approximately 60,000 square feet of administration space. The company is currently expanding with the addition of a new BioProcess Innovation Center, which will double the site’s laboratory space and capacity to support process characterization programs. The expanded laboratories will be fully operational in the spring of 2024. In addition, the company announced in September (September 2023) that a new viral vector manufacturingfacility in Darlington, UK, is GMP operational for manufacturing viral gene therapies, oncolytic viruses, and viral vaccines for clinical trials.
Lonza advancing biomanufacturing and drug-product expansions. Lonza is investing approximately CHF 850 million ($935 million) to add two mammalian drug-substance manufacturing facilities at its sites in Visp, Switzerland, and Portsmouth, New Hampshire. The expansion in Visp will add a new 27,500-square-meter large-scale mammalian drug-substance manufacturing facility. The facility is expected to be completed in 2024 with an investment of approximately CHF 650 million ($715 million). The expansion will complement the company’s existing large-scale biomanufacturing global network at its sites in Tuas, Singapore; Porriño, Spain; and Portsmouth, New Hampshire. In Portsmouth, New Hampshire, the company added a new CHF 200-million ($220-million) biomanufacturing facility for small-to-mid-volume production. The facility complements the company’s existing single-use network at sites in Hayward, California; Slough, UK; Tuas, Singapore; and Visp, Switzerland.
In addition, Lonza is investing CHF 500 million ($547 million) in a large-scale, commercial drug-product fill–finish facility in Stein, Switzerland. The new facility follows the company’s previous investment in formulation and clinical drug-product manufacturing and will be completed in 2026. The facility will be able to fill–finish a range of products, including antibodies, other proteins and polysaccharides, mRNA products, and viral vectors.
Also, in August (August 2023), Lonza and Vertex Pharmaceuticals, a Cambridge, Massachusetts-based bio/pharmaceutical company, broke ground on a new 130,000-square feet cell-therapy manufacturing facility in Portsmouth, New Hampshire. The new facility is being built adjacent to Lonza’s existing campus in Portsmouth and is a co-investment project between the two companies. The large-scale manufacturing facility will support the commercial production of the Vertex’s Type 1 diabetes cell-therapy portfolio, with a focus on two candidates: VX-880 and VX-264. Vertex’s first clinical program, VX-880, has demonstrated clinical proof-of-concept, and VX-264, is in Phase I/II development.
Cambrex divests drug-product business. In November (November 2023), Cambrex completed the sale of its Drug Product Business Unit to Noramco, a Wilmington, Delaware based CDMO of active pharmaceutical ingredients (APIs), including controlled substances. The former Cambrex’s Drug Product business provides product development, clinical and commercial manufacturing, and packaging from facilities in Mirabel, Québec, Canada, and Whippany, New Jersey. Cambrex had acquired the facilities through its $425-million acquisition of the drug-product CDMO, Halo Pharmaceuticals, in 2018; that acquisition at the time represented Cambrex’s strategic decision to add drug-product capabilities to its core small-molecule API development and manufacturing capabilities. While the divestiture represents a strategic reversal by Cambrex to be an end-to-end CDMO (i.e., provider of both APIs and drug products), the sale of the business represents a move by Normaco to become an end-to-end CDMO by providing Noramco, and its subsidiary, Purisys, a CDMO of APIs, additional capabilities, such as drug product formulation development, clinical and commercial drug product manufacturing, and packaging, to its core API development and manufacturing services.
Expansions in peptides, oligonucleotides (Bachem, Agilent Technologies, WuXi STA, and CordenPharma). A niche, but growing area of manufacturing expansions by CDMOs/CMOs is in peptides and oligonucleotides, with several companies announcing expansions in 2023.
Bachem, a Bubendorf, Switzerland-headquartered CDMO of peptides and oligonucleotides, is proceeding with a billion-dollar plus investment plan to increase manufacturing capacity across its sites, including new facilities. The company is constructing a new large-scale facility for the manufacture of peptides and oligonucleotides at its site in Bubendorf, Switzerland, with the commissioning of the new plant planned for 2024 with the first phase operational in 2024 and a second phase operational in 2026. By 2030, a further production site is planned at a new site in Sisslerfeld in the municipality of Eiken, Canton of Aargau, Switzerland. In all, Bachem is planning investments of CHF 550 million ($600 million) at its headquarters site in Bubendorf and CHF 750 million ($819 million) for the new site in Sisslerfeld/Eiken. Bachem is also investing in capacity expansions across its global manufacturing network at its sites in the following: Vionnaz, Switzerland; Torrance, California; Vista, California; and St. Helens, UK.
Earlier this year (2023), Agilent Technologies, a Santa Clara, California-based technology company and CDMO of nucleic acid APIs, broke ground for a $725-million investment to double manufacturing capacity of therapeutic nucleic acids at its facility in Frederick, Colorado, by adding two new manufacturing lines. The new investment is in addition to a previously announced $150-million investment to add 25,000 square feet of manufacturing capacity to the Frederick facility. Agilent’s manufacturing facilities in Colorado produce siRNA, antisense molecules, and CRISPR-guided RNA molecules. The expansion is expected to be completed by the end of 2026.
WuXi STA, a CDMO of drug substances and drug products, consolidated resources in a new brand, WuXi TIDES, to provide end-to-end contract research, development and manufacturing services for oligonucleotides, peptides, and their conjugates. In oligonucleotides, the company has six GMP solid-phase oligo synthesis (SPOS) production lines at its site in Changzhou, China. By 2024, the company will add more SPOS production lines. In April (April 2023), the company reported that it had added two 2,000-L reactors and a large-scale continuous purification system for peptide manufacturing at its Changzhou campus. With the two new 2,000 L reactors in operation, the total reactor volume of the solid-phase peptide synthesizers (SPPS) at WuXi TIDES increased to over 10,000 L. For peptides, the company plans to double its SPPS total reactor volume to more than 20,000 L in the future.
CordenPharma, a CDMO of drug substances and drug products, announced in 2023 that it is adding synthetic oligonucleotide manufacturing through a two-phase investment at its site in Colorado. Phase One involves reconditioning existing laboratory space, purchase of development equipment, and hiring a team to set up process and analytical development capabilities. Target completion is expected in the fourth quarter of 2023. Phase Two, which is being initiated at the same time as Phase One, includes the redesign of existing manufacturing space to create a fully GMP-compliant manufacturing area housing synthesis, cleavage, downstream processing, and lyophilization at the 10–100 mmol scale for early- to mid-phase clinical trial material supply. The introduction of oligonucleotide manufacturing at its Colorado facility is an extension of the company’s “Tides” capabilities, which includes peptide manufacturing. Earlier this year (2023), the company inaugurated increased commercial peptide production capacity with newly upgraded facilities at CordenPharma Colorado, After kicking off capital investments in early 2023, CordenPharma successfully completed a series of upgrades and modernizations to the facilityto increase the efficiency and throughput of solid-phase peptide synthesis peptide production.
Ajinomoto’s pending $554-million acquisition of Forge Biologics. A key acquisition in the gene- and cell-therapy CMDO/CMO space in 2023 was Ajinomoto’s pending $554-million acquisition ($620 million on an enterprise value on a cash-free and debt-free basis) of Forge Biologics, an Ohio-based gene-therapy CDMO. Forge has two capabilities in the gene-therapy manufacturing value chain: adeno-associated virus (AAV) and plasmid DNA manufacturing, with high-purity, high-yield AAV production technologies. The acquisition is scheduled to be completed in December 2023.
Bain’s acquisition of F.I.S. In July (July 2023), Bain Capital Private Equity agreed to acquire Fabbrica Italiana Sintetici (F.I.S.), a Vicenza, Italy-based CDMO of APIs. F.I.S. is owned by the Ferrari Family, and Bain Capital is buying 100% of the stock for F.I.S. from Nine Trees Group, the holding company of the Ferrari Family. In 2022, F.I.S. generated sales of approximately EUR 700 million ($781 million), with a network of three manufacturing facilities based in Italy and employing more than 2,000 people, including 250 R&D scientists.
In a related transaction, in July (July 2023), Minafin, which holds several fine chemical developers and manufacturers, including Minakem, acquired the Montreal operations of Delmar, a CDMO of generic APIs and formerly part of F.I.S. The Montreal plant has 174 m3 of reaction capacity and manufacturing permits for controlled substances as well as veterinary active ingredients.
SPAC eureKING builds its biologics CDMO capabilities. eureKING, a Paris-based special purpose acquisition company (SPAC) formed in 2022 with the intent to create a biologics CDMO, made good on that strategy with two announced acquisitions in 2023: SCTbio, a cell- and gene-therapy CDMO and Skyepharma, a Saint-Quentin-Fallavier, France-based CDMO focused on the development and delivery of oral drug technologies. Skyepharma has what it calls its “Skyehub” model thas an initial focus on live biotherapeutic products. eureKING said that Skyepharma’s scalable and manufacturing platform would facilitate eureKING’s strategy to combine companies specializing in the production of biological products, cell and gene therapies, and live biotherapeutics. 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.
New CDMOs enter the market. This year (2023) also saw several new CDMOs enter the market. Bridgewest Group, an investment firm,completed the acquisition of a sterile injectables manufacturing facility in Bentley, a suburb of Perth, Australia, from Pfizer and launched a new CDMO of sterile injectable drug products, NovaCina. The 34,000-square-meter cGMP facility has nine production lines across oncology/high-potency, blow–fill–seal and multi-format vial streams at clinical and commercial scales. The plant willl continue to produce drug products for Pfizer under a master services agreement. The facility has over 400 employees.
SynCrest, a joint venture formed earlier this year (March 2023) of Otsuka Chemical and Yokogawa Electric, a Tokyo-based provider of advanced technologies and products for measurement, control, and information support, launched contract research, development, and manufacturing services for peptides and nucleotides in Japan, Europe, North America, and South America. Using advanced continuous flow synthesis with in-line measurement, the company produces APIs, intermediates, and raw materials and provides a service for peptide-based therapeutics, from library synthesis and process development to clinical and commercial manufacturing. Manufacturing of the APIs, intermediates, and raw materials is carried out at SynCrest’s plant in Naruto, Tokushima Prefecture, Japan.
Earlier this year (2023), NewBiologix launched as a cell- and gene-therapy CDMO based in Lausanne, Switzerland. The company raised $50 million with funding led by Recipharm, a CDMO of small-molecule APIs, biologics, and drug products and the company’s co-founders, Igor Fish, the company’s CEO, and Nicolas Mermod, the company’s Senior Vice President, Research & Development. The company’s DNA-based platform is being developed to address manufacturing challenges associated with the production of recombinant adeno-associated virus (rAAV) vectors. Specifically, the company’s technologies will be applied to human (HEK-293) and mammalian (CHO) cell lines. The company will begin beta testing the cell-line prototypes with key collaborators by 2024 and anticipates making viral production cell lines commercially available by 2026.
Another new CDMO is the cell- and gene-therap space is Ascend Gene & Cell Therapies. which launched this year (2023) after raising a total of $132.5 million with a focus on AAV vectors. Its operations are headquartered in the UK with GMP production in Potters Bar, North London, platform technology research in the San Francisco Bay area, California, and a specialist process development and analytics team in Munich, Germany.
Note: currency conversions are at the time of the expansion or news announcement.