December 20, 2022
CDMO sector M&A activity continued apace in 2022 with contractors making deals to cater for evolving drug industry demands – particularly mRNA-related production capabilities – to add capacity and to tap regional markets.
The pharmaceutical contract manufacturing sector is highly fragmented yadda, yadda, yadda… Consolidation is an acknowledged growth strategy blah, blah, blah…
Deal making has been, and always will be, a defining characteristic of the CDMO space.
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The difference this year is that while some contractors have bought for traditional reasons – such as a desire to add capacity – others have made takeovers to extend their scientific capabilities in line with the emergence of new types of medicines.
In January, for example, Fujifilm agreed to acquire a cell therapy facility from Atara Biotherapeutics for $100 million. The plant in Thousand Oaks, California, can produce both clinical and commercial cell therapies including allogeneic T-cell and CAR T immunotherapies.
The same month, PE firm Great Point Partners bought Performance Cell Manufacturing and rebranded it as Cellipont Bioservices.
And in February, Recipharm bought Vibalogics from Ampersand Capital Partners. Vibalogics makes oncolytic viruses, viral vaccines and gene therapies, offering process and analytical development, manufacturing, testing and fill-finish services.
In the same month, Recipharm also purchased Arranta Bio, citing its skills in advanced therapy manufacturing as the driver for the deal. It also acquired Portuguese CDMO GenIbet, a producer of biological clinical trial material, RNA and viral vectors.
Also in February, MilliporeSigma – the US and Canada Life Science business sector of Merck KGaA – acquired Exelead for $780 million citing its capabilities “across the mRNA value chain” as a prompt for the deal. The firm said it plans to further invest over €500 million to scale up Exelead’s technology over the next ten years.
And in April, Asahi Kasei Medical said it would buy Bionova Scientific, citing its capabilities in next-generation antibody drug production as the prompt for the deal.
In May, Bora Pharmaceuticals spent $100 million to acquire Eden Biologics’ CDMO assets in Taiwan citing its “presence in the biological macromolecules and cell and gene therapy markets” as motivation for the deal.
But, as mentioned above, other CDMO sector M&A activity was focused on adding manufacturing capacity with the active pharmaceutical ingredient sector seeing a number of takeovers.
In January, for example, China-based Pharmaron Beijing Co acquired Aesica Pharmaceuticals from Recipharm group. The firm in Cramlington, Newcastle makes APIs.
At around the same time, API and intermediates contractor Dipharma Francis announced that Kalexsyn, a CDMO it acquired in 2018, has been merged into its 100% owner, Dipharma.
In February, CordenPharma bought three manufacturing facilities from Vifor Pharma, which will be renamed Corden Pharma Fribourg S.A. in Switzerland, and Corden Pharma Lisbon S.A. in Portugal.
Later that month, Asymchem Labs said it would buy US continuous manufacturing-focused CDMO Snapdragon Chemistry for $58 million. And in March, Sanofi launched Euroapi, a standalone API CDMO.
In April, Symeres bought Organix to add lipids expertise and gain a foothold in the US market.
Also, Novasep and PharmaZell merged to create a CDMO that makes everything from APIs to antibody drug conjugates. The firm since rebranded as Axplora.
In April, Shionogi Pharma Co, Chiyoda Corporation, Taisei Corporation, Fujimoto Chemicals Co., Takenaka Corporation, Yokogawa Electric Corporation and Nagase & Co launched Pharmira Co., a continuous manufacturing focused API maker and CDMO.
Another traditional M&A driver formulation development also prompted a number of deals in 2022.
In August, Catalent bought Metrics Contract Services for $475 million. The firm said the deal will strengthen its capabilities in integrated oral solid formulation development, manufacturing, and packaging.
The same month, delivery technology services firm LTS Lohmann bought Tapemark to bolster its transdermal drug delivery systems and oral thin film offering.
In October, Symeres bought Exemplify BioPharma, a provider of process and analytical chemistry and formulation development services.
In November, Kindeva Drug Delivery announced plans to merge with ex-Pfizer unit Meridian Medical Technologies to set up a drug-device CDMO.
Another notable development in 2022 was the emergence of dedicated takeover firms in the CDMO space.
The most notable of these deals took place in May when EureKING – a biomanufacturing-focused special purpose acquisition company (SPAC) – launched and unveiled plans to buy CDMOs in Europe.
The firm said it has identified 40 potential takeover targets, citing contractors with skills in biologics, cell and gene therapies and live biotherapeutics as examples.
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