Months after Cognate buy, Charles River divests plasmid DNA plant

Charles River says the divestment of a plasmid DNA CDMO facility in Sweden will help optimize its business and does not signify a U-turn in its cell and gene therapy strategy.

In February this year, Charles River Laboratories agreed to pay $875 million in cash to acquire Cognate BioServices. The deal propelled the biopharma services firm into the contract development and manufacturing organization (CDMO) space, adding a network of cell therapy and plasmid DNA manufacturing facilities. The deal went through in March.

But seven months on and the firm has offloaded one of the Cognate assets, selling a facility in Matfors, Sweden to a private investor group for approximately $52 million in cash with potential contingent payments of up to an additional $25 million.

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In a statement sent to this publication, Charles River said the decision to sell the plant was made “to help optimize our business,” and the firm remains committed to expanding its gene therapy services.

“Charles River will continue to provide plasmid DNA, as well as its broader suite of cell and gene therapy CDMO services, to global clients from its operations in the United Kingdom and United States.”

Previously run by Cognate acquisition Cobra Biologics, the Matfors site offered DNA services for gene therapies along with microbiota services. The site has approximately 130 employees and generated annual revenue of approximately $10 million in 2020.

Charles River’s other advanced therapy assets include cell-based and cell-mediated gene therapy services in Memphis, Tennessee, and Baltimore, Maryland, along with plasmid DNA and viral vector capabilities at facilities in Keele, UK.

Charles River also has cell therapy materials and leukapheresis capabilities added through the 2019 acquisition of HemaCare and the 2020 acquisition of Cellero.

The sale is one of two separate divestments by Charles River, with the firm’s Research Models and Services (RS) operations in Japan being sold to The Jackson Laboratory (JAX) for approximately $63 million.

“In connection with the RMS Japan transaction, JAX and Charles River have entered into a technology license agreement for JAX to produce and distribute Charles River’s research models in Japan,” we were told. “Charles River will continue to provide research models and services to global clients from its operations in North America, Europe, and China.”