The deal is anticipated to boost Lonza's large-scale biologics manufacturing capacity and will also help the firm cope with the demand for commercial mammalian contract manufacturing
The corporate office of Lonza in Basel Tower, Switzerland. (Credit: Lonza)
Swiss contract drug manufacturer Lonza has agreed to acquire Genentech’s large-scale manufacturing site for biologics in Vacaville, California, US, from Roche for $1.2bn in cash.
The Vacaville plant is said to be among the largest biologics manufacturing facilities in the world on the basis of volume with a total bioreactor capacity of over 330,000 litres.
The deal is anticipated to boost Lonza’s large-scale biologics manufacturing capacity. It will also help Lonza to cope with the demand for commercial mammalian contract manufacturing.
Additionally, it will help clients with established commercial products and compounds currently moving towards commercialisation inside the Lonza network.
As per the agreement, the contract drug manufacturer will provide jobs to about 750 Genentech personnel in the Vacaville site.
The facility will give Lonza’s clients instant access to a sizable increase in capacity in the US.
Additionally, this will establish a substantial commercial manufacturing footprint on the West Coast, enhancing Lonza’s current biologics facility located on the East Coast in Portsmouth, US, and complementing its global network spanning Europe and Asia.
The Swiss firm plans to allocate around CHF500m ($557.3m) in extra capital expenditure (CAPEX) towards upgrading the Vacaville facility. This investment aims to bolster capabilities in meeting the demand for advanced mammalian biologics therapies.
Roche’s present products made at the site will be supplied by Lonza in contracted volumes over the medium term. These will gradually be phased out as the site shifts to serve other clients.
Lonza biologics president Jean-Christophe Hyvert said: “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.”
The transaction is anticipated to close in H2 2024, subject to meeting standard closing conditions. The Vacaville location will become part of the Lonza’s biologics division.
Lonza is receiving financial advice from BofA Securities.