Genentech signs manufacturing agreements with Lonza
US-based biotech company Genentech has entered into an agreement with Lonza Group for Lonza to purchase Genentech's mid-scale mammalian biopharmaceutical production facility in Porrino, Spain for US$150m.
US-based biotech company Genentech has entered into an agreement with Lonza Group for Lonza to purchase Genentech's mid-scale mammalian biopharmaceutical production facility in Porrino, Spain for US$150m.
Concurrently, Genentech will enter into a supply agreement for the manufacture of certain Genentech products at Lonza's facility currently under construction in Singapore, with Genentech also receiving the right to exercise an exclusive option to purchase the Lonza Singapore facility.
The FDA-licensed Porrino facility has 40,000 litres of biologic manufacturing capacity and is currently dedicated to the production of Genentech's Avastin (bevacizumab) drug substance. Lonza plans to retain the facility's approximately 310 employees and will continue to produce Avastin for Genentech at Porrino under the terms of a short-term supply agreement.
The plant will also provide Lonza with immediate access to further mid-scale biomanufacturing capacity two years earlier than planned, which can be used to meet the needs of its other customers.
Under a concurrent agreement, Genentech plans to purchase Avastin and other oncology products from Lonza's planned 80,000-litre large-scale mammalian biopharmaceutical production facility in Singapore, and Genentech may opt to purchase the facility in the future. US FDA licensure for producing Avastin at the Lonza plant in Singapore is expected in 2010. The terms of the option to purchase the facility allow Genentech to acquire the facility during the period from 2007 to 2012 for a purchase price of $290m, plus an additional $70m in milestone payments if certain performance milestones are met.
'We believe that this transaction provides Genentech with benefits that enhance our manufacturing organisation and strengthen our strategic relationship with Lonza,' said Dr Patrick Y. Yang, executive vice president of Genentech's product operations. 'We are pleased that the FDA-licensed Porrino facility will continue to supply product to our patients, and we expect that our agreements will provide Genentech with flexibility, capacity and cost effectiveness to significantly improve our manufacturing capability.'
Subject to various closing conditions, the transaction is expected to close before the end of 2006.
In parallel, Lonza will progress with the building of a multi purpose shell and the reactivation and expansion of a previously mothballed reactor in Portsmouth, New Hampshire, US. This reactor, which is expected to come on stream in 2008, will have a 5,000-litre capacity. The Portsmouth site currently makes a number of marketed biopharmaceutical products, including Genentech's Rituxan (rituximab).