Movers & Shakers: Deals and Expansions of CMOs/CDMOs

Which CDMOs and CMOs are making the mark in terms of deal-making and expansions and what manufacturing sectors are seeing the greatest activity? DCAT Value Chain Insights rounds up the key investments by CDMOs/CMOs making the news.

Key activity in 2019 thus far

In looking at key activity of deals or expansions in drug-substance and drug-product development and manufacturing announced thus far in 2019, several deals stand out in terms of the size of the investment. Chief among them is Cambrex’s announcement last month (August 2019) of the pending sale of the company for $2.4 billion (inclusive of Cambrex’s net debt) to an affiliate of Pemira, a private-equity firm. The announced sale of the company follows two large-scale acquisitions by Cambrex. Last year (2018), Cambrex acquired Halo Pharmaceuticals, a contract provider of drug-product development and manufacturing services, for $425 million to provide Cambrex, a contract provider of small-molecule active pharmaceutical ingredients (APIs) and intermediates, with drug-product capabilities. Earlier this year (January 2019), Cambrex acquired Avista Pharma Solutions for $252 million to add early-stage development and analytical testing services to the company’s position in drug-substance manufacturing. Completion of the sale to Pemira is subject to customary closing conditions, including receipt of approval by Cambrex’s shareholders and customary regulatory approvals. Closing is expected to occur during the fourth quarter of 2019.

skid room Cambrex

Cambrex’s new high potency active pharmaceutical ingredient (HPAPI) manufacturing facility in Charles City, Iowa.

As Cambrex awaits its pending sale, it continues with several expansions announced or completed this year. Earlier this year, the company completed the construction of a $24-million, 6,000-square foot highly potent API manufacturing facility at its site in Charles City, Iowa with validation and operations beginning in May 2019. The company is expanding its solid-form screening and crystallization process-development facility in Edinburgh, Scotland, doubling the facility’s footprint to 15,000 square feet, a facility gained with its $252-million acquisition of Avista Pharma Solutions. Construction began in late August 2019 with a target completion date of the end of 2019.

Earlier this year (June 2019), the company added a new 600-square-meter facility at its site in Karlskoga, Sweden for new laboratories for process and analytical development and a $6-million, 3,000-square-meter logistics center. The Karlskoga site, which develops and manufactures small-molecule APIs, had earlier expanded large-scale manufacturing capacity. In April 2019, Cambrex also opened a new 120-square-meter quality control laboratory at its site in Paullo, Milan, Italy, which manufacturers generic and branded APIs.

Thermo Fisher and Catalent in $1-billion-plus deals. Both Thermo Fisher Scientific and Catalent made large moves to build their capabilities in cell and gene therapies. In May (2019), Thermo Fisher Scientific completed its $1.7-billion acquisition of Brammer Bio, a contract provider of viral vector manufacturing for gene and cell therapies. Also in May, Catalent completed its $1.2-billion acquisition of Paragon Bioservices, a contract provider of viral vector development and manufacturing services for gene therapies. Paragon has development and manufacturing capabilities in adeno-associated virus vectors, the most commonly used vector to deliver DNA to cells.

The acquisitions respectively by both companies continues multi-year efforts to build their end-to-end capabilities in drug-substance and drug-product development and manufacturing. In 2017, Thermo Fisher Scientific acquired Patheon, a contract service provider of both drug substances and drug products, for $7.2 billion. Patheon, whose historical core competency was in formulation development and drug product manufacturing, began to build its end-to-end capabilities in 2014 with the formation of DPx Holdings B.V., then privately owned by the private-equity firm JLL Partners (51%) and Royal DSM (49%), which was the result of a $2.65-billion deal between Patheon and DSM, which provided Patheon with both small-molecule manufacturing capabilities as well as further drug-product capabilities. In addition to DSM Pharmaceutical Products, Patheon made several other key acquisitions to build its end-to-end capabilities: Banner Pharmacaps (soft-gel capabilities), Gallus BioPharmaceuticals (biologics manufacturing), Agere Pharmaceuticals (solubilization technologies), IRIX Pharmaceuticals (small-molecule development and manufacturing), and a former Roche small-molecule API manufacturer in Florence, South Carolina.

For its part, in 2017, Catalent acquired Cook Pharmica, a CDMO of both biologic-based drug substances and parenteral drug products, for $950 million. The acquisition of Cook Pharmica provided Catalent capabilities in biologics development, clinical and commercial cell-culture manufacturing, formulation, finished-dose manufacturing, and packaging. The acquisition complemented Catalent’s existing capabilities in cell-line engineering, bioconjugate development, analytical services, biomanufacturing, prefilled syringes, and blow/fill/seal technologies.

Catalent Madison Interior ambr250 fully automated bioreactor system

Process development at Catalent’s Madison, Wisconsin facility using a multi-parallel automated bioreactor.

In making their respective acquisitions of Brammer Bio and Paragon Bioservices, Thermo Fisher and Catalent are adding new capabilities to their toolbox in cell and gene therapies. With the Brammer Bio acquisition, Thermo Fisher gains nearly 600 employees at primary locations in Massachusetts and Florida. With the acquisition of Paragon Bioservices, Catalent gains more than 380 staff members from two Baltimore-area sites. Paragon recently opened a new commercial manufacturing center near the Baltimore–Washington International Airport, equipped with 500-liter and 2,000-liter single-use bioreactors for clinical through commercial material production. The large-scale production campus, in addition to an expected second building built-out for commercial GMP manufacturing, will be able to provide more than 425,000 square feet of manufacturing space upon completion.

Further expansion activity: Thermo Fisher. In addition to its $1.7-billion acquisition of Brammer Bio, Thermo Fisher has made other acquisitions and organic expansions. On the drug-substance side, earlier this year (May 2019), Thermo Fisher Scientific agreed to acquire a drug-substance manufacturing site in Cork, Ireland, from GlaxoSmithKline for approximately EUR 90 million ($100.6 million). Thermo says it will expand capacity at the Cork site for the development and commercial manufacturing of complex APIs. The deal is expected to be completed by the end of 2019. On the biologics drug-substance side, the company is proceeding with its previously announced $50-million expansion of its St. Louis, Missouri biologics manufacturing facility. The expansion, announced in April 2018, was slated to become operational in 2019. On the drug-product side, Thermo Fisher is investing $150 million to expand its sterile fill–finish sites at its locations in Monza and Ferentino, Italy, and Greenville, North Carolina.

Further expansion activity: Catalent. In addition to its $1.2-billion acquisition of Paragon Bioservices, Catalent has made other moves to expand its capabilities. In July 2019, it completed the formation of a strategic alliance with Novavax, a clinical-stage vaccine company, under which Catalent, through Paragon, purchased manufacturing equipment and related assets for approximately $18 million, assumed the property leases to two Novavax product development and manufacturing facilities, and hired over 100 of Novavax’ manufacturing and quality employees. Concurrently, Novavax entered into a services arrangement with Paragon under which Paragon will provide ongoing process and analytical development and has the opportunity to manufacture GMP materials for several Novavax projects.

In addition, earlier this year (January 2019), Catalent announced an investment of $200 million in its biologics business to expand drug-substance manufacturing capacity and drug-product fill/finish capacity. The investments, phased over a three-year program, will be undertaken at the company’s biologics manufacturing sites in Madison, Wisconsin and Bloomington, Indiana. This follows a recent announcement to invest $14 million in packaging capabilities at the Bloomington site.

Earlier this year, Catalent announced a $40-million investment in its Winchester, Kentucky facility that includes adding commercial-scale spray drying with high-potent handling capabilities, as well as other increases to the site’s capacity and its formulation and controlled-release tablet and capsule manufacturing capabilities. Also this year, Catalent expanded the capacity of its global spray-drying operations through an agreement with Sanofi Active Ingredient Solutions, an industrial platform of Sanofi, under which Sanofi will provide Catalent with access to spray-drying manufacturing services for Catalent’s customers at Sanofi’s Haverhill, UK facility. The Winchester facility will work alongside the Sanofi Haverhill facility to enable transfer and scale-up of spray drying programs from Catalent’s specialized early-stage clinical development sites located in San Diego, California and Nottingham, UK. Separately, the company announced in April 2019 a $5-million investment at the company’s Somerset, New Jersey, drug-development center of excellence to expand its OptiMelt hot melt extrusion capabilities.

In other moves, in June (2019), Catalent agreed to purchase Bristol-Myers Squibb’s oral solid, biologics, and sterile product manufacturing and packaging facility in Anagni, Italy, in a deal that is expected to close by the end of 2019. With the acquisition, Catalent gains sterile drug-product fill/finish and packaging capacity in Europe to complement its existing sterile fill/finish capabilities in Belgium and its drug substance, analytical and fill/finish capabilities in North America.

In soft-gels, Catalent announced in April (2019) that it is investing $14 million to expand integrated turnkey softgel capabilities at its facility in Eberbach, Germany. The expansion, which is scheduled to be completed by mid-2020, includes two new softgel encapsulation lines and new printing technology, a vision inspection system, expansion of the facility’s softgel coating capabilities, and the addition of further packaging capacity.

Earlier this month (September 2019), Catalent announced it is investing $9 million in a new clinical supply facility in San Diego, due to open in the summer of 2020. The new 24,257 square-feet facility will specialize in services for early-phase clinical trials. Its capabilities will include clinical supply management, primary and secondary packaging, complex labeling services, clinical storage, distribution, and drug returns and destruction, and will include stability chambers. In April (2019), the company announced the completion of a new, 30,000-square-foot clinical supply facility in Shanghai, China.

Other investments by CDMOs and CMOs

Other CDMOs and CMOs are making investments to expand their capabilities. Highlights of key developments in drug-substance and drug-product development and manufacturing, announced in 2019, are highlighted below.

Chemicals/chemical API manufacturing

Almac. Earlier this year (January 2019), Almac Sciences, a member of the Almac Group, announced an expansion of its technology capabilities within its API services and chemical development portfolio with the implementation of continuous flow expertise at its global headquarters in Craigavon, UK, with further plans to introduce flow capacity within Arran Chemical Company, an Athlone, Ireland-based chemical company.

Separately, Almac brought on line a second stream for high-throughput GMP peptide manufacturing at its facility in Edinburgh, Scotland earlier this year (January 2019). The facility manufactures neoantigen-derived peptides for use in the production of patient-specific, individualized cancer vaccines. The facility underwent a successful inspection by UK regulatory authorities and has moved into routine GMP supply.

BioVectra. BioVectra has made investments in its large-scale synthetic chemistry and analytical development capabilities. The company completed the replacement of two 4,000-liter vessels used for small-molecule synthesis for compounds for late-stage clinical trials. For earlier stages of research, BioVectra operates several cGMP kilo labs, with access to reactors in the range of 30-800 liters. The company has also enhanced its analytical capabilities through the purchase of new equipment with combined investments of approximately $1.5 million. The company also announced the launch of services for producing cannabinoid (CBD) and CBD derivatives for clinical and commercial applications.

C2 Pharma. C2 Pharma, a Luxembourg-based phytochemical and chemical pharmaceutical manufacturing and distribution group, acquired the digoxin API product portfolio of the Polish company, Nobilus Ent. Through the agreement, C2 PHARMA is the product owner, and Nobilus is a manufacturing partner and releasing entity for the API.

Cerbios-Pharma. Cerbios-Pharma, a Lugano, Switzerland-based CDMO of both chemical and biological APIs, is expanding to include installation of a new production line in a building dedicated to high-potency APIs to accommodate larger volumes and batch sizes. Completion is expected to be in the second half of 2020. The investment follows another investment in a new antibody drug conjugation suite. The suite is scheduled to be qualified for cGMP production during the third quarter of 2019. Total investment, including the building, utilities and equipment, corresponds to $2.5 million. Overall, the expansions are part of a $30-million multi-year investment plan in high-potency API production.

Flamma. Earlier this year, Flamma acquired Teva Pharmaceuticals’ cGMP Chemical Synthesis Center in Malvern, Pennsylvania, a 40,000-square-foot facility in the Philadelphia area. Flamma has two cGMP facilities in Italy, located near Milan: Chignolo d’Isola and Isso. The Chignolo site is also where the company’s headquarters are located. Additionally, Flamma is established in China, where its 100%-owned Chinese subsidiary, Flamma Honkai, operates in Dalian in the Liaoning Province.

Lonza. In July, Lonza began the expansion of its bioconjugation facility in Visp, Switzerland that will span the next two years. The additional capacity will provide launch and commercial manufacturing and will serve the clinical-phase market for bioconjugates. In June, the company announced an expansion of its Visp, Switzerland site to increase highly potent API (HPAPI) capacity. The expansion adds two 4-square-meter multipurpose production lines for HPAPI manufacturing to complement Lonza’s existing range of production capacities from lab to large commercial scale. A subsequent capacity optimization will also improve Lonza’s flexibility in existing production lines. The HPAPI capacity expansion is expected to be on line by July 2020.

Olon. In July, Olon, a CDMO of APIs, announced that it had started construction of a new GMP facility at its microbial CDMO facility in Capua, Italy. Earlier this year, Olon acquired Capua BioServices, a Capua, Italy-based provider of CDMO services for microbial fermentation. Olon also closed on its acquisition of a manufacturing facility in Mahad, India from Sandoz. After the carve-out from Sandoz, as part of the asset-purchase agreement, the parties have committed to sign a long-term supply contract to guarantee continuous supply of products manufactured in Mahad. The plant’s main product is rifampicin, which is used to treat several types of bacterial infections, including tuberculosis. 

Piramal Pharma Solutions. In June, Piramal Pharma Solutions, announced it had opened a new wing at its Riverview, Michigan site dedicated to the production of high-potency APIs (HPAPIs) for a total investment of approximately $10 million.

Seqens. Earlier this year, Seqens opened a 34,000-square-meter lab that will serve as the company’s center of excellence at its site in Porcheville, France, near Paris. Known as Seqens’ Lab, the new lab offers research and development (R&D) services from early research and development stages to production for clients in several markets, including pharmaceuticals and cosmetics as well as specialty ingredients.

Sterling Pharma Solutions. Sterling Pharma Solutions, a Dudley, UK-headquartered contract provider of small-molecule API development and manufacturing services, announced earlier this year (April 2019) that its pilot-plant facility is operational at its UK site following a £6-million ($7.6-million) investment last year (2018).

Wilmington PharmaTech. Wilmington PharmaTech, a contract research/manufacturing organization with locations in Newark, Delaware and Suzhou Jiangsu, China, is expanding with plans announced earlier this year (February 2019) to hire up to 139 new employees and invest $18 million in a new research and manufacturing facility in Newark, Delaware.

Biologics manufacturing

AGC Biologics. In January, AGC Biologics a contract manufacturer of biologics, finalized plans to install 12 additional 2,000-liter single-use mammalian cell bioreactors and to establish a brand-new microbial contract development and manufacturing facility at its site in Seattle. The total investment for this expansion is estimated at 10 billion yen ($90 million) with full-scale operations slated to start in July 2020.

Aldevron. Aldevron, a contract provider specializing in the production of nucleic acids, proteins, and antibodies, announced in June expansion plans for a new 14-acre campus for gene and cell therapy manufacturing at its headquarters in Fargo, North Dakota. Phase I of the construction was scheduled to begin in August 2019.

Boehringer Ingelheim.  In January 2019, Boehringer Ingelheim initiated a capacity expansion in its biopharmaceutical contract manufacturing business at its commercial manufacturing site for biologics in China. The expansion covers an additional bioreactor and includes all needed utility and infrastructure to support the GMP operations of 2 x 2,000-liter single-use bioreactor manufacturing lines.

Biotechpharma UAB. Biotechpharma UAB, a biopharmaceutical CDMO based in Vilnius, Lithuania, announced in May further expansion of its fermentation capacity to 5,000 liters along with an additional process development laboratory for an investment of more than EUR 50 million ($56 million).

Fujifilm Diosynth Biotechnologies. In August, Fujifilm completed its acquisition of Biogen’s large-scale biologics manufacturing site in Hillerød, Denmark, near Copenhagen, for approximately $890 million. The acquisition follows other investments. In January 2019, Fujifilm Diosynth Biotechnologies, a CDMO of biologics and part of Fujifilm Corporation, announced plans to invest approximately JPY 10 billion (approximately $90 million) to expand existing production facilities at its North Carolina site. In May 2019, Fujifilm Diosynth Biotechnologies announced an expansion to its UK site through the creation of a new BioCampus. The total cost of the BioCampus project is estimated to be £12.6 million ($16.4 million). In June 2019, Fujifilm Corporation announced an initial $10-million investment in a full-scale, fully integrated continuous processing facility for non-GMP manufacturing of biopharmaceuticals at the Billingham, UK site of Fujifilm Diosynth Biotechnologies, the company’s contract biologics manufacturing arm.

Halix. In August, Halix, a provider of clinical and commercial proteins and viral products, completed its new 6,700-square-meter GMP facility in Leiden Bio Science Park, Leiden, the Netherlands, for the development and production of biopharmaceutical drug substances. The company says, as of August 2019 it is able to start production of viral products and protein production will follow soon.

Hitachi Chemical. Earlier this year (January 2019), Hitachi Chemical, a Tokyo-based chemicals and industrial manufacturer, agreed to acquire Apceth Biopharma, a Munich, Germany-based CDMO of cell and gene therapies, for EUR 75.5 million ($86.5 million).

IDT Biologika.  In July, IDT Biologika, a contract manufacturer of vaccines and biopharmaceuticals, opened a new multifunctional production facility for vaccines in Dessau-Rosslau, Germany to provide the company with additional capacity.

Lonza.  In September 2019, Lonza and Chr. Hansen Holding, a bioscience company, received approval from antitrust regulators needed to establish a 50/50 joint venture in the live biotherapeutic product market. The companies, which announced the JV earlier this year (April 2019), will invest EUR 90 million ($99 million) in the JV, which will serve as a CDMO to provide a full supply chain offering manufacturing of bacteria strains for therapeutic use.

WuXi Biologics.  In May 2019, WuXi Biologics, a contract biologics manufacturer, signed a letter of intent for a strategic partnership with an unnamed vaccine maker for a 20-year supply contract, estimated to be worth more than $3 billion. Under the letter of intent, WuXi Vaccines, a joint-venture company between WuXi Biologics and Shanghai-based Hile Bio-Technology, will build a dedicated vaccines-manufacturing facility to supply a commercial product to the unnamed client for the global market. Also in May 2019, WuXi Biologics began construction of an 1.3-million square foot manufacturing center in Chengdu, China, in southwest China. In its first-half earnings release from August 2019, WuXi Biologics provided an update of its global manufacturing expansions with a target of having total capacity exceed 280,000 liters by 2022. The company also noted its previously announced plans to expand construction of a new integrated biologics conjugation solution center for antibody-drug conjugates.

Formulation development/drug product manufacturing

Ajinomoto Bio-Pharma. Ajinomoto Bio-Pharma Services, a contract provider of both APIs and drug products, provided an update in March 2019 on several of its capital projects currently underway in the US and Belgium, which total over $100 million. In addition to the previously announced highly potent product conjugation and fully isolated fill line, which has recently begun operations in its new facility in San Diego, Aji Bio-Pharma is also adding a new fully isolated, nested flexible fill line, installing automated packaging and labeling equipment, and upgrading its continuous flow and small-molecule API manufacturing capabilities.

MedPharm. MedPharm, a UK-based contract provider of topical and transdermal product design and formulation development services, announced the expansion of its US Center of Excellence in Durham, North Carolina with an investment of $4 million. The facility expansion and equipment will more than triple the existing footprint of its US facility to 25,000 square feet. The company announced the expansion earlier this year (January 2019).

Lonza. In July, Lonza entered into a binding contractual agreement for the purchase of a sterile drug-product fill–finish facility in Stein, Switzerland from Novartis. Operational since 2009, the facility includes classified cleanroom areas for cGMP manufacture as well as office, lab space, utilities and storage. The facility will continue to perform sterile manufacturing, including liquid and lyophilized dosage forms for up to 200-L bulk volumes for clinical supply and commercial launch.

LSNE. Lyophilization Services of New England (LSNE) announced the expansion of GMP storage capabilities at its facility in Bedford, New Hampshire earlier this year (July 2019). LSNE also completed its acquisition of a sterile injectables manufacturing facility in Leon, Spain earlier this year (June 2019). The new site, LSNE-Leon, will be an addition to LSNE’s existing manufacturing capabilities and allow for its services in Europe.

PCI Pharma Services. PCI Pharma Services, a provider of pharmaceutical packaging solutions and a CDMO of drug products, is expanding its manufacturing center in Tredegar, Wales, to double highly potent tableting capacity. On the packaging side, PCI Pharma Services is investing in a new clinical packaging facility near Dublin, Ireland. Upon completion, the facility will provide more than 75,000 square feet of space and serve as a primary and secondary packaging, storage, logistics and distribution center. PCI says the expansion will take place over the coming months and will bring additional controlled-room-temperature and cold-chain storage capabilities as well as clinical packaging services.

Selkirk Pharma. Selkirk Pharma, a recently formed CDMO, is investing $30 million for a new aseptic fill–finish facility in Washington State. The facility will house a new 65,000-square feet building. The sterile vial and pre-filled syringe manufacturing line will produce injectable drug products. Initial client fills are planned for the first quarter of 2020. The facility will also house two additional manufacturing lines, details of which the company says will be announced.

Velesco Pharma. Velesco Pharma, a contract analytical and formulation services provider, is tripling its clinical manufacturing capacity with the purchase and fit-out of a new facility in Wixom, Michigan.

Vetter. Vetter, a CDMO of aseptically prefilled syringe systems, cartridges and vials, is expanding its US clinical manufacturing facility located at the Illinois Science & Technology Park in suburban Chicago in Skokie, Illinois. Since beginning full operations in late 2011, Vetter’s US early-stage development site has been expanding, including expanding storage capacity by 150% to 3,700 square feet. With the new additions, most of which were scheduled to be completed by April 2019, the site will increase its storage space by an additional 3,100 square feet.

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