Dive Brief:
- Lonza will acquire Roche’s Genentech biologics manufacturing facility in Vacaville, California, for $1.2 billion, the contract drug manufacturer announced Wednesday.
- The Switzerland-based company plans to invest approximately 500 million Swiss francs (about $560 million) to upgrade the facility and will extend job offers to around 750 Genentech staffers currently employed at the site.
- The acquisition aims to increase Lonza’s commercial contract manufacturing for mammalian therapies, which are made from cells isolated from animal tissues. It will also grow the company’s U.S. production network, the release stated.
Dive Insight:
The Vacaville facility currently has a total bioreactor capacity of around 330,000 liters, making it one of the largest biologics manufacturing sites in the world, according to Lonza.
Roche products currently manufactured at the site will be supplied by Lonza, with committed volumes ramping down during a transition period, a Lonza presentation about the transaction stated. Roche will use about 30% of the facility’s capacity in 2025 and then will phase out as the site transitions to serve Lonza’s other customers.
Roche acquired the Vacaville site in 2009 and the company said last year it was looking to sell or vacate it by 2029, as it didn’t expect to need the very large medicine volumes the plant provides, Reuters reported.
“The Vacaville site is a highly valuable strategic acquisition that will make capacity immediately available for our customers and unlock future growth for our Biologics division,” Lonza President of Biologics Jean-Christophe Hyvert said in the press release. “It will support us in providing a commercialization path to existing customers and incremental large-scale commercial capacity to our partners.”
Lonza also increased its mid-term guidance and now expects sales growth of 12% to 15% from 2024 to 2028, compared to its previous forecast of 11% to 13% growth.
The company’s biologics business continues to drive its overall growth, with it and the small molecules division accounting for more than 70% of total revenues in fiscal year 2023, interim CEO and Chairman Albert Baehny said during the company’s Q4 earnings call. Lonza signed approximately 130 new CDMO customers in 2023 and around 350 new clinical and commercial programs, compared to 115 CDMO customers and 375 new clinical and commercial programs the year prior.
The transaction between Lonza and Roche is expected to close in the second half of the year and is subject to customary closing conditions. After closing, the Vacaville site will be integrated into Lonza’s biologics division, joining a network of existing mammalian manufacturing sites in Visp, Switzerland; Slough, England; Portsmouth, New Hampshire; Porriño, Spain, and Singapore, according to the release.
The billion-dollar acquisition announcement comes just months after Lonza decided to close a mammalian cell manufacturing facility in Hayward, California, in January, laying off 218 employees. The closure was due to the specific Hayward site having limited growth opportunities beyond its clinical scope, a Lonza spokesperson said at the time.
