Further CDMO consolidation in CGT space as RoslinCT and Lykan agree to merge

The combination of the two cell and gene therapy CDMOs brings customers a transatlantic footprint and combined expertise, the companies say.

UK-based cell therapy contract development and manufacturing organisation (CDMO) RoslinCT – a spinout from the Roslin Institute – has entered into a business combination agreement with Massachusetts-based Lykan Bioscience to merge.

“The combination will create a global leader in process development and GMP manufacturing of advanced cell and gene therapies with transatlantic footprint in the US and UK,” a spokesperson from RoslinCT told BioProcess Insider. “Demand for high-quality development and manufacturing capacity is increasing across the world.”

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They told us the total number of cell, gene and tissue-based therapeutic development companies globally grew by 19% in 2021 over the previous year, with a significant increase in the number of gene-editing trials.

“By combining our two businesses, we will be able to accelerate the development and manufacturing timelines for their innovative advanced therapies.”

The new entity will offer clients combined process and analytical development laboratories and cGMP manufacturing facilities. A 64,000 square-foot facility in Hopkinton, Massachusetts, operated by Lykan, offers cell therapy manufacturing and development laboratories with a total of 16 cGMP processing suites set to be operational by the end of the year, following an expansion in 2021. RoslinCT has a 40,000 square-foot facility, including 8 cGMP suites, at its site in Edinburgh, Scotland, with further expansion imminent.

“There are significant advantages to combinations like the RoslinCT and Lykan one,” the spokesperson said. “Creating a CDMO with a transatlantic footprint and combined expertise signifies better support for clients to overcome the challenges of bringing their life-saving therapy to market and transforming patient lives. The combination of RoslinCT and Lykan will create a unique platform providing key value-added services to the highly complex segment of advanced cell therapies.”

Financials regarding the merger were not disclosed, but the deal is being supported by healthcare private equity firm Global Healthcare Opportunities (GHO) Capital Partners, which will make a majority investment in Lykan and will back the funding of the combined entity. GHO invested in RoslinCT earlier this year. WindRose Health Investors, the majority owner of Lykan Bioscience, will reinvest in the new combined group along with Lykan Management.

Once the deal is closed, RoslinCT and Lykan will continue to operate under their current names, and respective CEOs Peter Coleman and Patrick Lucy will remain in their current roles. “We think this is the best governance structure at the moment as the businesses combine,” we were told.

CGT CDMO M&A

The merger was described as “further consolidation in the cell and gene therapy CDMO field” by Anthony Davies, founder and CEO of advanced therapy consulting practice Dark horse Consulting.

Large CDMOs Thermo Fisher and Catalent were keen to enter the burgeoning CGT space back in 2019 through the respective acquisitions of Brammer Bio and Paragon Bioservices. Then in 2020, Catalent bought cell therapy CDMO Masthercell for $315 million, raising the question as to whether such M&A was the new norm? It turns out, it was.

Deals in the space include Hitachi Chemical Advanced Therapeutics Solutions (HCATS) acquiring German cell therapy manufacturing firm apceth Biopharma (and later rebranding as Minaris), Cognate buying Swedish DNA and viral vector manufacturer Cobra Biologics (later acquired by Charles River Laboratories), AGC Bio adding Molecular Medicine (MolMed), WuXi AppTec acquiring Oxgene, Evotec buying Rigenerand.

Meanwhile, the cell and gene sector has seen a number of new players enter the space through CDMO acquisitions: Danaher buying Aldevron, for example, and Korean investment firm SK Holdings adding Yposkesi.