Biogen Enters Agreement to Sell Its Large-Scale Biologics Manufacturing Site
Biogen recently announced it has entered into a share purchase agreement with FUJIFILM Corporation under which Fujifilm will acquire the shares of Biogen’s subsidiary, which holds Biogen’s biologics manufacturing operations in Hillerød, Denmark, for up to $890 million in cash, subject to minimum purchase commitment guarantees and other contractual terms. The approximately 800 employees at the Hillerød subsidiary are expected to continue employment under Fujifilm ownership.
As part of the proposed transaction, Biogen also announced it will enter into manufacturing services agreements with Fujifilm. Following the completion of the transaction, Fujifilm will use the Hillerød site to produce commercial products for Biogen, such as TYSABRI, as well as other third-party products.
“We continually evaluate our manufacturing strategy, and we believe this agreement serves the best interest of our employees, customers, partners, and shareholders,” said Michel Vounatsos, Biogen’s Chief Executive Officer. “As we continue to diversify our portfolio across multiple modalities and bring online our state-of-the-art manufacturing facility in Solothurn, Switzerland, we believe we have enhanced our manufacturing capabilities and capacity for biologics with this transaction. Fujifilm is a well-respected leader in manufacturing biologic products and they share our pioneering culture.”
“We are proud to combine the talent and expertise of the Hillerød employees with Fujifilm’s capabilities as an industry-leading contract development and manufacturing organization,” said Paul McKenzie, PhD, Biogen’s Executive Vice President, Pharmaceutical Operations and Technology. “We will work with Fujifilm with the goal of ensuring a smooth transition and reliable supply for our customers and patients.”
The Hillerød site includes a 90,000-L biologics production facility with assembly, labeling, and packing capabilities, quality control laboratories, and warehouses. The transaction is subject to closing conditions, including customary filings and clearances under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, in the US, the Danish Competition Act, and the Korean Monopoly Regulation and Fair Trade Act. The closing of the transaction is expected to occur in the second half of 2019.
Following the closing of the transaction, Biogen will operate manufacturing facilities in Research Triangle Park (RTP), North Carolina, and Solothurn, Switzerland, which Biogen expects to be operational by the end of 2020.
Biogen expects to record a total after-tax loss in the first quarter of 2019 of approximately $130 million to $150 million, or $0.66 to $0.76 per diluted share, related to the proposed transaction. This loss includes an estimate of $120 million associated with guarantees of future minimum purchase commitments. These estimates are based on current exchange rates and business conditions.
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