Swiss contract drug manufacturer Lonza (OTCPK:LZAGF) (OTCPK:LZAGY) has agreed to acquire a large-scale biologics manufacturing site in California from Roche (OTCQX:RHHBY) (OTCQX:RHHBF) for $1.2B in cash.
The Genentech facility in Vacaville is one of the largest biologics manufacturing facilities in the world by volume, with a bioreactor capacity of around 330,000 liters.
The acquisition will boost Lonza’s (OTCPK:LZAGF) (OTCPK:LZAGY) large-scale biologics manufacturing capacity for mammalian therapies and significantly extend the presence of its facility network in the U.S., the company said in a news release.
The transaction is expected to close in the second half of 2024, subject to customary closing conditions. Upon closing, the facility will be integrated into Lonza’s Biologics division, joining a network of existing mammalian manufacturing sites around the world.
Lonza (OTCPK:LZAGF) (OTCPK:LZAGY) plans to invest around CHF 500M in additional CAPEX to upgrade the site and enhance capabilities to meet demand for the next generation of mammalian biologics therapies.
The products currently manufactured at the site by Roche (OTCQX:RHHBY) (OTCQX:RHHBF) will be supplied by Lonza (OTCPK:LZAGF) (OTCPK:LZAGY), with committed volumes over the medium term, phasing out over time as the site transitions to serve alternative customers.
As the transaction is expected to be accretive to sales growth, Lonza has raised its 2024-2028 sales growth target to 12%-15% per year, from its previous estimate of 11%-13% growth. Outlook for core EBITDA margin, return on invested capital and CAPEX trajectory also remains unchanged.
