Repligen Buys Novozymes Biopharma Unit

Repligen Corporation recently announced the execution of a definitive agreement to acquire the business of Novozymes Biopharma Sweden AB in a cash transaction of $22.7 million and future potential milestone payments of $5.6 million. This transformative acquisition will elevate Repligen to a world-leading supplier of products for manufacturing biologic drugs with the potential to yield sustainable growth and profitability in fiscal year 2013, beginning April 1, 2012. The combined company is expected to generate total revenues of approximately $50 million in fiscal year 2013.

The Novozymes Biopharma acquisition diversifies and expands Repligen’s product offering and customer base while doubling the company’s manufacturing capacity. Novozymes Biopharma AB is a leader in the manufacture and supply of growth factors used in mammalian cell culture and Protein A affinity ligands used in the production of monoclonal antibodies. The company is located in Lund, Sweden, and operates a 45,000-sq-ft c-GMP-capable production facility, which was recently renovated in 2008 with an investment of $25 million. The products acquired in the Novozymes transaction are anticipated to generate $16 to $17 million in revenue in 2011, and are sold primarily under long-term supply agreements with major life sciences companies, including EMD Millipore, Sigma-Aldrich Corporation, and GE Healthcare.

“This acquisition positions Repligen as a leading producer of high-value, consumable products that will directly benefit from the long-term growth of the biologics market,” said Walter C. Herlihy, President and Chief Executive Officer of Repligen Corporation. “Earlier this year, we announced our strategic objective to transition into a commercially focused company, and the acquisition of the Novozymes business will deliver on that goal by significantly augmenting our product portfolio and providing a path to sustainable profitability.”

Repligen is currently a leader in the supply of four different forms of recombinant Protein A, a key ingredient used in the production of most monoclonal antibodies. Through this transaction, Repligen will acquire Novozymes “native” Protein A product, which is used in the production of several of the early blockbuster monoclonal antibody drugs. The combined company will be well positioned to fully benefit from the long-term growth of the monoclonal antibody market. There are more than 50 approved monoclonal antibody products and 200 candidates currently in clinical development, most of which are manufactured using Protein A. Importantly, as part of the acquisition, GE Healthcare and Repligen have extended the term of their existing supply agreement for recombinant Protein A from 2014 to 2021. A further key benefit of the acquisition is Repligen’s expansion into the cell culture ingredients market, which increases the company’s product breadth and opens a market opportunity for them in the production of fermentation ingredients and a future market opportunity as stem and cell-based therapies emerge.

The combined company will manufacture and sell more than 20 products to the biopharmaceutical industry, which are incorporated into the manufacture of more than 50 approved products and 200 products in clinical development. The products will be sold under long-term supply agreements with four leading life sciences companies as well as directly to a variety of end-users and will expand the customer base. The key products that Novozymes produces include insulin like growth factor (LONGR3 IGF-I), native and recombinant Protein A products, and other growth factors, which have potential applications in cell-based therapies.