Merck & Co to buy Avecia Biologics

By Gareth Macdonald

- Last updated on GMT

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US drug major Merck & Co will buy into the UK's contract biologics manufacturing sector with the acquisition of Tees Valley-based Avecia Biologics.

The unit, currently part of privately owned Avecia Investments, comprises a process development and scale-up manufacturing facility in Billingham that employs around 500 people in the production of drugs for cancers, heart disease and stroke.

One of these drugs, according to the Associated Press, is an anti-inflammatory owned by Dyax that is soon to be launched under the Kalbitor brand name.

Merck, which will also acquire Avecia’s existing manufacturing contracts, said it will speak with the UK firm’s customers about ongoing requirements after the deal is concluded next year.

Like many Big Pharma firms facing the loss of patents on top selling drugs, Merck has been ramping up its biologics capacity, beginning last December with the launch of its BioVentures unit, which will make both branded and generic biotech drugs.

Merck followed this up with, in February, the $130m acquisition of a manufacturing facility from fellow US group Insmed and, in November, with the addition of biologics capacity owned by Schering-Plough after the firms’ $41bn mega-merger.

The move also comes at the end of a busy few weeks for the UK sector that has seen GlaxoSmithKline (GSK) confirm plans to invest in a new biomanufacturing facility and, more recently, Recipharma move for contract manufacturer Cobra.

John McCubbins, SVP of biologics and therapeutics at Merck’s manufacturing unit, said the deal is part of the firm’s ongoing biologics expansion strategy.

He added that: “This transaction follows an initial strategic development and supply relationship with Avecia Biologics and will provide us with an operational facility staffed by an experienced workforce that is highly skilled in a broad portfolio of bioprocess systems."

In response, Steve Bagshaw, Avecia’s president, said the deal recognizes his firm’s ten year track record in biologics production and bioprocess development and “provides the exciting opportunity to focus on advancing Merck's broad early and mid-stage portfolio of biologic candidates."

Avecia’s US contract oligonucleotides production business, based in Milford, Massachusetts, is part of the Merck acquisition.

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