As the number of cell and gene therapies in development increases so must manufacturing capacity, leaving biopharma with a crucial decision; buy or build? With yesterday's $1.2bn all-cash takeout of the manufacturer Paragon Biosciences, Catalent is betting on companies opting for buy. And Catalent is not alone in seeing the promise of hoovering up available gene and cell therapy contract manufacturing businesses; in March Thermo Fisher bought Brammer Bio for $1.7bn. Catalent’s move on the private equity-backed Paragon came days after Paragon opened a new manufacturing facility in Baltimore, and on the same day that it announced the extension of an existing relationship with Sarepta to build more gene therapy manufacturing capacity. Both events bode well for Catalent, which clearly has an eye on the long-term forecast claiming a $40bn addressable market for gene therapy. As for the near term, one rationale for the deal comes in the form of the $200m Paragon is expected to bank this year from manufacturing contracts and the promises of much more to come in future. Catalent is getting in early on gene therapy consolidation, and with reports of demand for gene therapy manufacturing outstripping supply there could be more such deals.
|Selected cell and gene therapy manufacturing deals|
|Apr 2019||Catalent||Paragon Bioservices||Acquisition||$1.2bn|
|Mar 2019||Thermo Fisher||Brammer Bio||Acquisition||$1.7bn|
|Jan 2019||Hitachi Chemical||Apceth Biopharma||Acquisition||$86m|
|Oct 2018||Lonza||Octane Biotech||Controlling stake||-|