Merck & Co. buying own dedicated WuXi Vaccine plant for $500m+

“As part of MSD’s continuous assessment of its operations and evolving business needs on January 6, 2025, the company signed an Asset Purchase Agreement (APA) with WuXi Bio confirming its intent to acquire all assets of the WuXi Vaccines manufacturing facility located in Dundalk, Ireland,” a spokesperson from the biopharma company told BioProcess Insider in an email. “The two parties will now begin the transition planning process to prepare for final closing.”

The investment of more than $500 million brings a 15,520 square-meter, three-story facility with both drug substance and drug product manufacturing, along with 150 staff. It is the latest boost for Merck’s Ireland production network, which the spokesperson said has seen investments of over $3 billion over the past three years. This includes expansions at Merck’s biologics facilities in Carlow and Dunboyne, County Meath.

Merck should be familiar with the facility as it was commissioned in 2019 by contract development and manufacturing organization (CDMO) WuXi Vaccines specifically to service a 20-year contract valued at $3 billion with the then undisclosed pharma giant.

“As part of MSD’s continuous assessment of its operations and evolving business needs, the company believes that the WuXi Vaccines facility aligns well with our business objectives,” we were told.

According to one Reddit post, rumors the WuXi Vaccines site might be offloaded to Merck were circling as early as August

BIO(not so)SECURE?

The sale comes amid political pressure on WuXi Vaccines’ parent company WuXi Biologics, which was named in the BIOSECURE Act. If it becomes law, the Act will restrict US firms from working with WuXi Biologics along with a number of other Chinese service providers.

The US House of Representatives approved the bill in September, triggering speculation that WuXi Biologics and fellow CDMO WuXi Apptec could put some of their operations up for sale. Rumors have already turned into reality, with the latter’s Advanced Therapies Unit (ATU) recently snapped up by US healthcare-focused investment firm Altaris.

However, unlike WuXi ATU, which is mostly operated from Philadelphia, Pennsylvania, the BIOSECURE Act may not have played as big a part in the decision to sell the Ireland site.

The facility “no longer meets Wuxi Bio's ROI [return on investment] standards,” Jefferies analyst Cui Cui wrote in a note. “Per management, this transaction would help Wuxi Bio to optimize capacity resources and is unaffected by the BIOSECURE Act.” In fact, a separate biologics facility in Ireland will continue to be operated by WuXi Biologics.

Moreover, Cui suggests the Trump administration may not reinitiate BIOSECURE when it takes power later this month. “Senator Rand Paul (Republican, Kentucky), a key opponent of the BIOSECURE Act, is set to chair the Homeland Security Committee under the Trump presidency, whereas key supporter Brad Wenstrup is retiring.

“Moreover, many believe Trump’s government will likely be more business-oriented and that usage of Chinese CDMOs could help US pharma cut costs by 30-60%. Given lowering drug prices in the US is supported by both parties, allowing US pharma companies the flexibility to operate efficiently and maintain an optimal cost structure is essential.”