CDMO/CMOs: The Top 10 Movers and Shakers of 2019

By Patricia Van Arnum - DCAT Editorial Director

December 11, 2019

What was the most noteworthy activity from CDMOs/CMOs in 2019? DCAT Value Chain Insights’ Top 10 ranking reveals the companies involved in the most significant mergers and acquisitions and expansions from 2019.

CDMOs/CMOs: A Top 10 Ranking of Developments from 2019

1. Cambrex Going Public to Private in $2.4-billlion deal. On top of the list is the largest merger and acquisition among contract development and manufacturing organizations (CDMOs) and contract manufacturing organizations (CMOs) in 2019: Pemira’s $2.4-billion acquisition of Cambrex. Earlier this year (August 2019), Cambrex announced that it had reached an agreement to be acquired by Pemira Funds, a private-equity firm, for $2.4 billion and at the time of that announcement indicated that it would be open to other offers as well. Cambrex eventually accepted Pemira’s offer, and the deal closed this month (December 2019). With the closing of the deal, Cambrex goes from a publicly traded company to a privately held company.

The move by Cambrex to be acquired follows two large-scale acquisitions by the company. Last year (2018), Cambrex acquired Halo Pharma, a contract provider of drug-product development and manufacturing services, for $425 million, which added drug-product capabilities to the company’s existing and core competency in small-molecule active pharmaceutical ingredient (API) development and manufacturing services. Also, earlier this year (January 2019), Cambrex acquired Avista Pharma Solutions for $252 million to add early-stage development and analytical testing services.

2. Thermo Fisher’s and Catalent’s billion-plus acquisitions in cell and gene therapy manufacturing. Adding capabilities in cell and gene therapy production has also been a target of certain CDMOs/CMOS are two key deals completed in 2019 were Catalent’s $1.2-billion acquisition of Paragon Bioservices, a Baltimore, Maryland-based contract provider of viral vector development and manufacturing services for gene therapies, and Thermo Fisher Scientific’s $1.7-billion acquisition of Brammer Bio, a CDMO of viral vector manufacturing for gene and cell therapies.

3. Fujifilm’s $890-million acquisition of Biogen’s large-scale biomanufacturing facility. Another large-scale deal by a CDMO was Fujifilm’s acquisition of Biogen’s large-scale biologics manufacturing site in Hillerød, Denmark, near Copenhagen, for approximately $890 million, in a deal completed earlier this year (August 2019). The site now becomes the fourth biopharmaceutical manufacturing site of Fujifilm Diosynth Biotechnologies, a subsidiary of Fujifilm and a biologics CDMO/CMO.

The acquisition follows other investments by Fujifilm in its CDMO business. In January 2019, Fujifilm Diosynth Biotechnologies 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 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.

4. Recipharm’s pending $650-million acquisition of Consort Medical. In a move to strengthen its core capabilities, last month (November 2019), Recipharm, a CDMO of APIs and drug products, agreed to acquire Consort Medical, the parent company of Aesica, a CDMO of APIs and drug products, and Bespak, a CDMO of drug devices, for £505 million ($652 million). The combined entity will have annual pro forma revenue of SEK 10.8 billion ($1.1 billion) and pro forma EBITDA (earnings before interest, taxes, depreciation and amortization) of SEK 1.8 billion ($187 million). The Board of Directors of Consort has confirmed its unanimous intention to recommend the shareholders of Consort to accept the offer. The transaction is expected to close in the first quarter of 2020.

Consort currently employs approximately 2,000 people globally, of which approximately 1,400 are located in the UK. Consort has UK facilities in King’s Lynn, Cambridge, Nelson, Milton Keynes, Cramlington, Queensborough and Hemel Hempstead. It has facilities in Germany in Monheim and Zwickau and a facility in Pianezza, Italy. Recipharm, which is headquartered in Stockholm, Sweden, operates development and manufacturing facilities in France, Germany, India, Israel, Italy, Portugal, Spain, Sweden, the UK and the US.

5. Biomanufacturing expansions—WuXi Biologics. Biomanufacturing has been an active area of investments by several CDMOs/CMOs, which have continued or announced new expansions in 2019. WuXi Biologics is one CDMO that has been particularly active. It is proceeding with an expansion plan with a target of having total capacity to exceed 280,000 liters by 2022 at its sites in China, Ireland, Singapore and the US through the addition of 180,000 liters of bioreactor capacity by 2022. Key projects include an investment, announced in 2018, of EUR 325 million ($392 million) for a new biologics drug-substance manufacturing facility in Mullagharlin, Dundalk, County Louth, Ireland, which is expected to be operational in 2021. In May 2018, WuXi Biologics began the construction of a new 1.3-million square-foot integrated biomanufacturing center in Chengdu in southwest China.

6. WuXi Vaccines’ $3-billion deal for contract vaccine manufacturing. Although vaccine manufacturing is a niche area, it represented one of the largest supply agreements among CDMOs announced in 2019. Earlier this year, WuXi Vaccines, a joint venture of WuXi Biologics and Shanghai Hile Bio-Pharmaceutical, a producer of animal health vaccines, entered into a strategic partnership via a letter of intent with an undisclosed global vaccine producer for a 20-year manufacturing contract valued at more than $3 billion. The contract is targeted to be finalized by this year. To support that agreement, WuXi Vaccines is investing $240 million to build a new vaccine-manufacturing facility in Ireland.

7. Acquisitions by CDMOs/CMOs of former manufacturing facilities of Big Pharma.  Fujifilm’s $890-million acquisition of Biogen’s large-scale biomanufacturing facility (see “Number Four” story in ranking) was the largest deal among sales of ex-Big Pharma facilities to CDMOs/CMOs, but there were other smaller deals in 2019. In 2019, Thermo Fisher Scientific acquired 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. Also, in 2019, Catalent agreed to purchase Bristol-Myers Squibb's oral solid, biologics, and sterile product manufacturing and packaging facility in Anagni, Italy. Also in 2019, Lonza entered into a binding contractual agreement for the purchase of a sterile drug-product fill–finish facility in Stein, Switzerland from Novartis. The sterile, multi-product facility served as the Novartis Center of Excellence for sterile clinical (Phases I to III) drug manufacture.

8. High-potency manufacturing investments. High-potency manufacturing, which requires specialized high-containment manufacturing conditions, has been an active investment by certain CDMOs/CMOs for both active pharmaceutical ingredients (APIs) and drug products. A summary of some recent investments is highlighted below.

Cambrex. Earlier this year (April 2019), Cambrex completed the construction of a $24-million highly potent API (HPAPI) manufacturing facility at its site in Charles City, Iowa. The 6,000-square- foot facility was scheduled to commence customer projects in May 2019.

Lonza. Lonza is proceeding with a multi-year (2017 to 2020) CHF 100-million ($100 million) investment for HPAPIs and for increased automation in small-molecule manufacturing in its site in Visp, Switzerland, the largest production site in the company. The investments center on HPAPIs and “Manufacturing 4.0” to enhance automation and digitalization in its small-molecule manufacturing operations. In July (2019), Lonza began the expansion of its bioconjugation facility in Visp 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 (2019), the company announced an expansion of its Visp site to increase 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.

Seqens. Seqens is investing approximately $30 million for high-potency manufacturing for a new facility, which will consist of two units, located in the same building, a smaller one named UPP10 and a larger one named UPP30, to handle production of potent molecules from tens of kilograms to several hundreds. The new facility is in Villeneuve-La-Garenne, France, located outside of Paris. Construction started at the beginning of this year and was scheduled to be completed in the fall of 2019.

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 HPAPIs 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 HPAPI production.

Piramal Pharma Solutions. Earlier this year (June 2019), Piramal Pharma Solutions, opened a new wing at its Riverview, Michigan site dedicated to the production of HPAPIs for a total investment of approximately $10 million.

CordenPharma. Other recent expansions include those by CordenPharma, which in 2017, acquired a former Pfizer 54,000-square-foot API manufacturing facility in Boulder, Colorado; the site specializes in the development, scale-up, optimization, and production of highly potent and cytotoxic/cytostatic APIs from development quantities to commercialization. The site complements the company's capabilities in both HPAPI and high-potency drug-product manufacturing. 

Procos SpA. In 2018, Procos SpA added a GMP manufacturing unit dedicated to high-potency APIs at its facility in Cameri, Italy, located near Milan. The high-potency manufacturing unit is part of a larger investment and site-expansion project of $70 million that was initiated in 2014 and that was supported by Procos’ parent company, CBC Co. Ltd. Group, a privately held company based in Tokyo.

BSP Pharmaceuticals. BSP Pharmaceuticals, a Latina Scalo, Italy-based CDMO of oral solid dosage forms and injectables, is expanding high-containment capacity dedicated to oncology compounds. It is expanding existing facilities for oncology products and cytotoxics by approximately 30,000 square feet to increase its total conjugation capacity of antibody drug conjugates (ADCs) to 200 kilograms of monoclonal antibodies per annum. The company is also expanding injectable drug-product capacity by 25% through the addition of  5 million lyophilized vials to its current capacity of 20 million lyophilized vials per annum. It is also adding new capacity to support production of immunotherapies. The company has completed the construction of two new buildings with a footprint of approximately 150,000 square feet to allow for up to five GMP suites to manufacture injectable drug products and to include approximately 30,000 square feet to generate the utilities needed to feed the new plant. The new capacities will be available by the end of 2020

Ajinomoto Althea. In August 2018, Ajinomoto Althea, a San Diego, California-headquartered CDMO, opened a new antibody drug conjugate and highly potent fill/finish facility near its existing campus in San Diego. The 57,000-square-foot facility manufacturing facility includes areas dedicated to bioconjugation, formulation, purification, quality control, and sterile fill/finish including lyophilization. The facility can accommodate early clinical phase through commercially approved programs.

9. New CDMOs/CMOs with focus on live biotherapeutic products. This year (2019) also saw the entry of new CDMOs/CMOs focusing on a niche modality, live biotherapeutic products. A live biotherapeutic product contains a live microorganism that is used for the prevention, treatment, or cure of a disease or condition and their potential use has increased with better understanding of the link between human health and the human microbiome. Many of the microorganisms identified for the manufacture of live biotherapeutic products are obligate or strict anaerobes and spore-forming organisms and require specialized expertise in handling and cultivating the organism as well as specialized facilities and equipment.

Earlier this year (May 2019), Arranta Bio, a new CDMO that focuses on the human microbiome, was formed provide live biopharmaceutical products for microbiome developers by bacterial fermentation, isolation, drying and encapsulation. Arranta is establishing late clinical-stage and commercial-ready capacity at a new facility in Watertown, Massachusetts, which the company expects to come on line in mid-2020. Arranta Bio was founded by Mark Bamforth, founder and former CEO of Brammer Bio, a CDMO focusing on cell and gene therapies, which Thermo Fisher Scientific acquired for $1.7 billion in May 2019. Arranto Bio has since raised $82 million in founding, formed a strategic partnership with Thermo Fisher, acquired Captozyme, a clinical CDMO for microbiome biotherapeutics, and established a Center of Excellence for microbiome development and clinical supply.

Earlier this year, Lonza and Chr. Hansen Holding, a bioscience company, announced an investment of EUR 90 million ($99 million) for funding a new joint venture for forming a new CDMO in the live biotherapeutic product market. The joint venture, BacThera, and is headquartered in Basel, Switzerland with production facilities in Denmark and Switzerland.

10. CDMOs/CMO and API patent reform in the EU. Although not a direct investment or expansion, the European Union’s adoption earlier this year (2019) of manufacturing waivers to supplementary protection certificates (SPCs), was an important policy decision for generics and biosimilars producers and active pharmaceutical ingredient (API) manufacturers. The manufacturing waiver for SPCs has been the subject of great debate between the generics/biosimilars industry and innovator drug companies. The purpose of the original EU legislation that authorized SPCs, which was enacted in 1992, was to recompense product-development companies for the time taken to obtain regulatory approval of their medicines and give them longer market exclusivity in the form of a SPC. The SPC regulation, however, according to some, had the unintended effect of putting the European generic-drug, biosimilar, and API manufacturing industries at a competitive disadvantage vis-à-vis manufacturers producing in non-EU countries where no similar patent/SPC protection exists.

The European Parliament approved the SPC manufacturing waiver in April 2019, and the European Council formally adopted the measure in May 2019. The waiver came into force in July 2019, and companies will be able to start manufacturing under the waiver from July 2022.

The adoption of the new regulation for an SPC manufacturing waiver entitles EU-based companies to manufacture a generic or biosimilar version of an SPC-protected medicine during the term of the certificate, if done either for the purpose of exporting to a non-EU market where protection has expired or never existed, or for stockpiling during the final six months of an SPC ahead of entry into the EU market. Generic and biosimilar makers will be required to notify authorities before they start production of their products at least three months in advance, meet labeling obligations to ensure that their products are not diverted to the EU, and inform their supply chains that the products are covered by the waiver and cannot be sold in the EU market before the Day-1 entry, according to information from the European Parliament.