Aragen $100m PE boost to bolster CDMO ambition in India and beyondAragen $100m PE boost to bolster CDMO ambition in India and beyond

Under terms of the deal – announced as the healthcare industry flocked to the JP Morgan Healthcare Conference in San Francisco, California – Quadria will acquire a minority stake in contract development and manufacturing organization (CDMO) Aragen Life Science. 

“The funds will be used to fund our ongoing and future CAPEX (capital expansion) plans,” Manni Kantipudi, Aragen’s CEO told BioProcess Insider.  

“This includes setting up new infrastructure to expand our capacity; strengthening our capabilities in niche segments such as oligonucleotides, peptides, antibody-drug conjugates (ADCs), biology services and biologics; and investing in new technology adoption – especially in the areas of artificial intelligence and machine learning in drug discovery and manufacturing.” 

According to Kantipudi, Aragen already offers gene-to-GMP capabilities across its sites. “Our US site at Morgan Hill, California is already handling non-GMP manufacturing for batches from 1 liter to 250 liters.” 

Furthermore, the company commissioned a manufacturing site in Bangalore, India in 2022. The first phase of the construction is complete with a pilot plant used for non-GMP batches up to 50 liters already operational with a GMP manufacturing suite set to come online by end of Q2 this year. 

“The GMP suite would be capable of delivering manufacturing batches at 200 L to 2,000 L scale both in fed batch and intensified mode,” Kantipudi said. “The suite is so configured to deliver one batch every four to five days.” 

Furthermore, the site is future-proofed with the provision to expand capacity through the installation of multiple single-use bioreactors at a 5,000 L scale, in scale-up mode or scale-out mode. “These would allow us to provide an integrated solution encompassing process and analytical development plus validation, stability, cell banking, and small- to large-scale GMP manufacturing towards clinical and commercial supply of drug substance.” 

The $100 million places an approximate value on Aragen of $1.4 billion. 

India, customers, and ambition 

The investment from Quadria will further support Aragen’s long-term strategy of, according to the firm, becoming “the ‘partner of choice’ for the global life-science industry, both for small and large molecules.” 

We asked Kantipudi about Aragen’s current customer make-up and the demand that has driven the recent investments in capabilities and – presumably – the PE injection. 

“Demand in terms of customers has been consistent; we see predominantly Western big pharma, biotech and animal health customers, with a growing Asian base – the shift is that we are seeing more outsourcing coming to us for larger parts of the discovery and development paradigm.” 

The firm is increasingly seeing innovators interested in partnering with third parties that provide fully integrated services from discovery to commercial supply, especially one with a presence in both India and the US. 

“In that space there are very few players with our capabilities,” he said. “That’s been one of our big USPs that we have the discovery and early phase development services in both India and the West Coast of the United States.  

“It means for our US-based biotechs we can partner to do much of the discovery in the United States before moving manufacturing to India to expedite development and take advantages of the capacities and technologies we have there. It’s a hybrid approach that delivers the best of both worlds.” 

India, historically, has had a slight image problem from western pharma manufacturing eyes, having faced substantial scrutiny from the US Food and Drug Administration (FDA) over the years due to lapses in quality control, data integrity, and operational practices.  

Moreover, Rhonda Duffy, COO at Indian drug giant Biocon, recently urged fellow Indian drugmakers “to set a standard and prove ourselves” by consistently meeting high standards, telling CPHI India delegates “big pharma companies are hesitant to risk high-value raw materials here, unless we can guarantee reliability.” 

Kantipudi disagreed that quality concerns are still a problem, instead pointing to technology and scientific expertise as ways for the country, and Aragen in particular, to distinguish themselves.  

“We have been continuously investing in upgrading our infrastructure and adopting advanced technologies to be able to provide the best value service to our customers. While cost is an important criterion, it’s also increasingly about capabilities and capacities-led decisions for our partners.”