Lonza signs double deal with Genentech

Under the first agreement, Swiss custom manufacturer Lonza will acquire Genentech's mid-scale mammalian biopharmaceutical production plant based in Porriño, Spain for $150m (€117m). Thanks to this deal, Lonza gains access to additional biomanufacturing capacity two years earlier than planned. The plant is currently licensed to produce blockbuster drug Avastin (bevacizumab), a monoclonal antibody used in cancer treatment. As part of this transaction, Genentech will also outsource the manufacturing of the drug to Lonza for a short period of time, with the production carried out at the Porriño facility. In a second deal, Lonza will carry on with the building of a 80,000 litre large-scale mammalian biopharmaceutical production facility in Singapore, which is expected to be licensed by the FDA in 2010. The company said this facility will be built in parallel with its own planned plant in Singapore, which is expected to come on stream in 2011. Furthermore, Lonza said it will reactivate and expand a reactor that had been put aside in Portsmouth, New Hampshire. This reactor, which is expected to be up and running in 2008, will have a 5,000-litre capacity. The Portsmouth site currently makes a number of marketed biopharmaceutical products, including Genentech's cancer drug Rituxan. Lonza already has a commercial relationship with Genentech, producing around 50 per cent of the biotech company's requirements for Rituxan over the next few years. However, the two new deals signify a closening relationship between the two firms after Genentech's plans to dramatically increase in-house production capacity last year following its $408m acquisition of Biogen-Idec's Oceanside facility let the contract manufacturer down, who had hoped that the success of Avastin added to Genentech's capacity constraints would give way to an outsourcing agreement for the drug. Biopharmaceuticals are one of the key growth drivers of the pharmaceutical and biotechnology industries, and the sector is booming, with approximately one-fourth of new drugs coming on the market being biopharmaceuticals and generating in excess of $35bn in 2004, with annual sales projected to surpass $52bn by 2010. Over the last couple of years the sector has seen a growing trend among pharmaceutical companies, like Genentech, to bring the production of biologics in-house, only outsourcing fast steps requiring high volumes.