CDMOs/CMOs: The Top Moves Thus Far in 2021
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What have been the key deals thus far in 2021 by CDMOs/CMOs? Biomanufacturing, including for cell- and gene-therapies, continues to be an active target for mergers and acquisitions. The largest deal thus far is Thermo Fisher’s pending $20.9-billion (cash and debt) acquisition of the CRO, PPD, but what have been other key moves?

Top deals thus far in 2021

This year (2021) has been an active year for mergers and acquisitions (M&A) thus far in 2021 for the CDMO/CMO sector. There have been several large-scale acquisitions announced as well as several companies making smaller scale acquisitions of CDMOs or manufacturing facilities. Highlights of some of the key deals are outlined below.

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Thermo Fisher Scientific’s pending $20.4-billion acquisition of PPD. The largest deal thus far in 2021 is Thermo Fisher Scientific’s pending $20.4-billion acquisition of the contract research organization (CRO), PPD. Announced in April (April 2021), Thermo Fisher agreed to acquire PPD, for $17.4 billion in cash plus the assumption of approximately $3.5 billion of net debt. The transaction, which is expected to be completed by the end of 2021, is subject to the satisfaction of customary closing conditions, including the receipt of applicable regulatory approvals.

PPD provides a range of clinical research and laboratory services for drug development. In 2020, the company generated revenue of $4.7 billion and has approximately 26,000 employees globally. Upon close of the transaction, PPD will become part of Thermo Fisher’s Laboratory Products and Services Segment, which houses its CDMO business, which includes development and manufacturing services for drug-products, drug-substances (small molecules and biologics), and cell and gene therapies.

In a smaller and separate acquisition, Thermo Fisher added to its contract viral vector manufacturing services with the acquisition of Henogen S.A., Novasep’s viral vector manufacturing business in Belgium, for approximately EUR 725 million ($875 million). The deal was completed in January (January 2021).

Dahaner’s pending $9.6-billion acquisition of the CDMO Aldevron. Another large deal in the CDMO/CMO sector is Danaher’s pending $9.6-billion acquisition of Aldevron, a Fargo, North Dakota-based CDMO of DNA plasmid, mRNA, and proteins. The acquisition, announced in June (June 2021), will add to Danaher’s life-sciences business, which includes Cytiva (formerly GE Healthcare Life Sciences, which Danaher acquired in 2020 for $21.4 billion), Pall, and Beckman Coulter Life Sciences. Following the close of the transaction, Aldevron will operate as a standalone operating company and brand within Danaher’s Life Sciences segment. Aldevron is supplying plasmid DNA to Moderna for Moderna’s COVID-19 vaccine. Aldevron’s production of plasmid DNA takes place in its 70,000-square-foot GMP facility in Fargo. Buildout and validation of an additional 189,000-square-foot expansion has been completed for additional manufacturing capacity.

Lonza’s CHF 4.2 billion ($4.5 billion) divestment of its Specialty Ingredients business. In a move that showed its strategic emphasis on its core CDMO business, earlier this month (July 2021), Lonza completed the divestment of its former Specialty Ingredients business and operations to Bain Capital and Cinven, two private-equity firms, for an enterprise value of CHF 4.2 billion ($4.5 billion). The divestment strategically puts Lonza as a pure-player in bio/pharmaceuticals. The CDMO business of Lonza provides end-to-end development and manufacturing services for drug substances (small molecules, biologics, and cell and gene therapies) and drug products, principally oral solid dosage products through its $5.5-billion acquisition of Capsugel in 2017 as well as services for inhalation and parenteral drugs. The former Lonza’s Specialty Ingredients business provides microbial control services for professional hygiene and personal-care products and custom development and manufacturing of specialty chemicals and composites to support the electronics, aerospace, food, and agrochemical industries.

Private-equity firm EQT’s $2.8-billion acquisition of Recipharm. Earlier this year (2021), the private-equity firm, EQT, closed its $2.8-billion acquisition of Recipharm, a CDMO of APIs and drug products. EQT already owned CDMOs Aldevron (plasmid DNA for viral vectors) and Fertin Pharma (specialty dose forms); it also owns SHL Medical, a developer and manufacturer of injectable delivery devices (1).

Private-equity firm Clayton, Dubilier & Rice’s approximate $3.7-billion acquisition of UDG Healthcare. In June (June 2021), the private-equity firm of Clayton, Dubilier & Rice agreed to buy UDG Healthcare for $3.7 billion. UDG is the parent company of contract packager, Sharp (36% of operating profits), and strategic marketing services provider, Ashfield (64%) (1).

Pending $1.2-billion sale of Vectura to Philip Morris. Another large deal is the pending sale of Vectura Group, a Chippenham, UK-based CDMO of inhaled drug-delivery services for £852 million ($1.2 billion) to Philip Morris International (PMI), a cigarette and tobacco manufacturing company. Earlier this month (July 2021), PMI reached an agreement with the board of Vectura Group on the terms of an all-cash, recommended offer to acquire Vectura. The agreement followed an earlier offer for Vectura in May (May 2021) from Murano Bidco Limited, indirectly controlled by funds managed by the Carlyle Group, an investment firm. For PMI, the acquisition is part of the company’s “Beyond Nicotine” strategy, announced in February (February 2021), which sets a goal to generate more than 50% of its total net revenues (at least $1 billion) from smoke-free products by 2025. PMI is seeking to leverage its expertise in inhalation and aerosolization into adjacent areas, including respiratory drug delivery and selfcare wellness. PMI says it expects to close the transaction in the second half of 2021, subject to a shareholder vote and approval by the appropriate regulatory authorities.

Charles River Laboratories’ $1.2-billion acquisitions of the CDMOs Vigene Biosciences and Cognate BioServices.  Charles River Laboratories, a CRO, made three deals to fortify its position in early development of cell and gene therapies. In May (May 2021), the company agreed to acquire Vigene Biosciences, a Rockville, Maryland-based CDMO specializing in viral vectors, in a deal worth up to $350 million ($292.5 million upfront and contingent additional payments of up to $57.5 million). The deal is expected to close in the third quarter. With operations based in Rockville, Maryland, Vigene will geographically expand and be complementary to Charles River’s existing gene-therapy CDMO capabilities, which it expanded through the $875-million acquisition of Cognate BioServices, a CDMO specializing in cell and cell-mediated gene-therapy products, in March (March 2021). Also, in March (March 2021), Charles River acquired Retrogenix, a UK-based early-stage CRO providing specialized bioanalytical services utilizing its proprietary cell microarray technology.

Multiple acquisitions by WuXi AppTec and its subsidiaries. WuXi AppTec and its subsidiaries announced several acquisitions in 2021 to further build its capabilities in biomanufacturing, including for cell and gene therapies, as well as drug-product manufacturing. In May (May 2021), WuXi Biologics announced the completion of three acquisitions: (1) Pfizer’s biologics drug-substance and drug-product manufacturing facilities in Hangzhou, China; (2) CMAB Biopharma, a biologics CDMO headquartered in Suzhou, China; and (3) a former Bayer biomanufacturing site in Wuppertal, Germany. All these acquired facilities are expected to be ready for GMP manufacturing in 2021.

In addition, in March (March 2021), WuXi AppTec completed the acquisition of Oxgene, an Oxford, UK-based contract provider of discovery and biomanufacturing services for cell and gene therapies. Oxgene became a fully owned subsidiary of WuXi Advanced Therapies, WuXi AppTec’s cell and gene therapy contract testing, development and manufacturing business unit.

Also, in 2021, WuXi STA, a subsidiary of WuXi AppTec, agreed to acquire a drug-product manufacturing facility from Bristol-Myers Squibb in Couvet, Neuchâtel, Switzerland. The facility has commercial-scale production capacity for capsule and tablet dosage forms.

W.R. Grace’s $570-million acquisition of Albemarle’s fine chemistry services business. In the small-molecule space, in June (June 2021), Albemarle completed the sale of its Fine Chemistry Services business to W. R. Grace & Co. for approximately $570 million. The acquisition adds analytical, regulatory and manufacturing capabilities to Grace’s pharma portfolio focused on chromatographic resins, formulation excipients, drug delivery, and pharmaceutical intermediates and active pharmaceutical ingredients (APIs). As part of the transaction, Grace acquired Albemarle’s operations in Tyrone, Pennsylvania, and South Haven, Michigan.

Catalent’s acquisitions in cell- and gene-therapy development and manufacturing. Last month (June 2021), Catalent agreed to acquire RheinCell Therapeutics, a Langenfeld, Germany-based developer and manufacturer of human induced pluripotent stem cells. The deal is expected to close before the end of 2021, subject to customary conditions. Upon closing, RheinCell’s current employees will join Catalent’s Cell & Gene Therapy business.

In May (May 2021), Catalent acquired Promethera Biosciences’ cell-therapy manufacturing subsidiary, Hepatic Cell Therapy Support SA (HCTS), including its 32,400-square-foot facility in Gosselies, Belgium. The facility will accommodate Catalent’s commercial-scale plasmid DNA (pDNA) manufacturing and is located on Catalent’s existing campus in Gosselies, adjacent to the Delphi Genetics building. Catalent announced the acquisition of Delphi Genetics earlier this year (2021), a spinoff from the Université libre de Bruxelles and a bioproduction CDMO with capabilities in pDNA development and cGMP manufacturing. Catalent gained its facilities in Gosselies, Belgium with the $315-million acquisition of MaSTherCell, a provider of cell- and gene-therapy development and manufacturing services in 2020.

New CDMO Resilience’s acquisitions of Ology Bioservices and two other manufacturing facilities. Resilience, a recently launched manufacturing and technology company, has made several acquisitions thus far in 2021. Resilience was launched in November 2020 with initial capital of $800 million with a specific focus on manufacturing innovation, including for new modalities. Its executive leadership includes Patrick Yang, Ph.D., Vice Chairman, Resilience, and former Executive Vice President and Global Head of Technical/Product Operations, Roche/Genentech, and Rahul Singhvi, Sc.D., CEO, and Director, and former Chief Operating Officer of Takeda’s Vaccine business, and former President and CEO of Novavax, a Gaithersburg, Maryland-based vaccine company.

In April (April 2021), Resilience acquired Ology Bioservices, an Alachua, Florida-based biologics CDMO. Ology Bio’s manufacturing capabilities include cell-and-gene therapies, live-viral vaccines and vectors, oncolytic viruses, plasmids, and monoclonal antibodies. Also in April (April 2021), Resilience acquired two commercial manufacturing facilities in North America, including a facility from Sanofi. The acquired facility from Sanofi is a 310,000-square-foot plant in Boston, Massachusetts, with multiple 2,000-L bioreactors capacity and multiple downstream processing trains. The company also purchased from an undisclosed partner a 136,000-square-foot plant in Mississauga, Ontario providing upstream and downstream processing and aseptic fill–finish.

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Curia’s (formerly AMRI’s) pending acquisitions of Integrity Bio and LakePharma. Albany Molecular Research, Inc. (AMRI), a contract research, development and manufacturing organization (CRDMO), announced a name change earlier this month (July 2021) to Curia. The company also agreed to acquire two contract service providers: Integrity Bio, a Thousand Oaks, California-based CDMO of biologics formulation development and fill–finish manufacturing services, and LakePharma, a San Carlos, California-based CRDMO specializing in the production and evaluation of DNA vectors, viral vectors, cell lines, proteins, antibodies, mRNA and conjugates. Both deals are expected to close in the third quarter 2021. The acquisition of LakePharma positions Curia (formerly AMRI) in biologics manufacturing and the acquisition of Integrity Bio adds to the company’s capabilities in sterile manufacturing.

Reference

1. J. Miller, “Mid-Year CDMO Review: COVID-19 Vaccine Manufacturing and M&A,” DCAT Value Chain Insights, June 9, 2021.

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