In a strategic move that significantly escalates its capacity in the biologics manufacturing landscape, Lonza, a key global player in manufacturing for the pharmaceutical, biotech, and nutraceutical markets, announced its acquisition of Genentech’s large-scale biologics manufacturing facility in Vacaville, California, from Roche for USD 1.2 billion. This acquisition marks a significant expansion of Lonza’s manufacturing capabilities, aiming to meet the surging demand for commercial mammalian contract manufacturing.

The Vacaville facility, renowned for its substantial bioreactor capacity of approximately 330,000 liters, ranks as one of the largest biologics manufacturing sites globally. With this acquisition, Lonza not only gains a massive increase in manufacturing capacity but also welcomes around 750 Genentech employees to its workforce, who will continue their roles under Lonza’s stewardship.

This acquisition is a timely response to the growing demand within the Contract Development and Manufacturing Organization (CDMO) industry for commercial biologics capacity. Innovative therapies are continuously reaching approval stages, necessitating expanded capacity for production. The Vacaville site will grant Lonza’s clients immediate access to significant new capacity in the United States, the world’s leading pharmaceutical market, and establish a robust West Coast commercial manufacturing presence. This complements Lonza’s existing site on the East Coast in Portsmouth (US) and its international footprint across Europe and Asia.

To further enhance the facility’s capabilities, Lonza plans an investment of approximately CHF 500 million in additional CAPEX. This investment aims to upgrade the Vacaville site and augment its capacity to manufacture the next generation of mammalian biologics therapies. Products currently manufactured at the site by Roche will continue to be supplied by Lonza, with committed volumes over the medium term, eventually transitioning to accommodate other customers.

Jean-Christophe Hyvert, President of Biologics at Lonza, commented on the acquisition, emphasizing the strategic value of the Vacaville site. “The Vacaville site is a highly valuable strategic acquisition that will make capacity immediately available for our customers and unlock future growth for our Biologics division. We are excited to take our leading large-scale mammalian offering to its next chapter of growth,” Hyvert stated, highlighting the aim to provide incremental large-scale commercial capacity to partners and a commercialization path to existing customers.

The transaction is anticipated to close in the second half of 2024, subject to customary closing conditions. Once finalized, the Vacaville site will be integrated into Lonza’s Biologics division, joining a prestigious network of mammalian manufacturing sites. Following the acquisition, Lonza has updated its Mid-Term Guidance 2024 – 2028, reflecting an expected increase in sales growth from 11 – 13% CAGR to 12 – 15%.

BofA Securities served as financial advisors to Lonza for this transaction, underlining the significant financial and strategic planning involved in this expansive deal. The acquisition not only strengthens Lonza’s capacity and market presence but also reinforces its commitment to supporting the development and manufacturing of life-saving biologic therapies on a global scale.

  biologics manufacturing, bioreactor capacity, CDMO, commercial mammalian contract manufacturing, Genentech, Lonza, Pharmaceutical Industry, Roche, Vacaville facility