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Lonza have announced it has signed an agreement to acquire the Genentech large-scale biologics manufacturing site in Vacaville, California (US) from Roche for $1.2 billion.
The acquisition will significantly increase Lonza’s large-scale biologics manufacturing capacity to meet demand for commercial mammalian contract manufacturing from customers with existing commercial products, and molecules currently on the path to commercialisation within the Lonza network. The Vacaville (US) facility currently has a total bioreactor capacity of around 330,000 liters, making it one of the largest biologics manufacturing sites in the world by volume. Under the agreement, approximately 750 Genentech employees at the Vacaville (US) facility will be offered employment by Lonza.
Demand for capacity for commercial biologics is expected to remain high across the CDMO industry as innovative new therapies reach approval. In this context, the acquisition of the Vacaville (US) site will provide Lonza’s customers with immediate access to significant new capacity in the United States, currently the world’s largest pharmaceutical market. It will also create a significant West Coast commercial manufacturing presence, complementing Lonza’s existing Biologics site on the East Coast, in Portsmouth (US), as well as its international network across Europe and Asia.
Lonza plans to invest approximately CHF 500 million in additional CAPEX to upgrade the Vacaville (US) facility and enhance capabilities to satisfy demand for the next generation of mammalian biologics therapies. The products currently manufactured at the site by Roche will be supplied by Lonza, with committed volumes over the medium term, phasing out over time as the site transitions to serve alternative customers.
Jean-Christophe Hyvert, President, Biologics, Lonza, commented: “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. It will support us in providing a commercialisation path to existing customers and incremental large-scale commercial capacity to our partners. We have deep and long-standing industrial expertise in delivering commercial scale manufacturing services for our customers’ therapies. In combining this with the strong legacy of the Vacaville facility, its highly skilled colleague community and its proven track record on quality, we are excited to take our leading large-scale mammalian offering to its next chapter of growth.”
The transaction is expected to close in H2 2024, subject to customary closing conditions. Upon closing, the Vacaville (US) site will be integrated into Lonza’s Biologics division, joining a network of existing mammalian manufacturing sites in Visp (CH), Slough (UK), Singapore (SG), Portsmouth (US) and Porriño (ES).
As the transaction is expected to be accretive to sales growth, Lonza has updated its Mid-Term Guidance 2024 – 2028. Its sales growth range was set at 11 – 13% CAGR in CER, and has now been updated to 12 – 15%. Mid-Term Guidance for CORE EBITDA margin and ROIC remains unchanged. The Mid-Term Guidance for the net debt / CORE EBITDA ratio and CAPEX trajectory also remain unchanged.