Lonza agrees to buy Vacaville biologics facility

Biologics manufacturing equipment — Large-scale equipment for biologics manufacturing

Lonza has signed an agreement to purchase Roche’s Genentech biologics manufacturing facility in Vacaville, California, for $1.2 billion in cash. The proposed acquisition would add large-scale capacity for mammalian therapies to the company’s contract manufacturing business. The site has approximately 330,000 litres of total bioreactor capacity.

Approximately 750 Genentech employees at the facility will receive offers of employment from Lonza under the agreement. Roche products already manufactured there will continue to be supplied by Lonza, with committed volumes declining over a transition period as the facility moves towards serving other customers.

Lonza biologics manufacturing

Purchase and planned facility investment

Lonza plans approximately CHF500 million of additional capital expenditure to upgrade the facility and expand its capabilities for next-generation mammalian biologics therapies. This planned expenditure accompanies the acquisition. The company expects completion in the second half of 2024, subject to customary closing conditions, before integration into its Biologics division.

The California operation would join Lonza’s existing mammalian manufacturing locations in Visp, Switzerland; Slough, England; Portsmouth, New Hampshire; Porriño, Spain; and Singapore. The proposed purchase adds a West Coast location to a network already serving customers across several countries.

Solano County rolling hills — Rolling foothills near Vacaville

Revised medium-term sales outlook

Lonza’s revised 2024–2028 sales growth guidance is 12%–15% compound annual growth at constant exchange rates, compared with 11%–13% previously.
Its medium-term CORE EBITDA margin and return-on-invested-capital guidance remain unchanged.
The company also retains its net debt/CORE EBITDA and capital-expenditure trajectory guidance.

Existing customer and programme base

Lonza signed approximately 130 new contract development and manufacturing customers during 2023, compared with 115 in the preceding year. New clinical and commercial programmes numbered around 350, against 375 previously. These customer and programme figures describe separate measures of activity.

Biologics and small molecules together accounted for more than 70% of Lonza’s fiscal 2023 revenue. The Vacaville announcement follows the decision to close its clinical mammalian manufacturing facility in Hayward, California, affecting 218 employees. Lonza attributed that closure to limited growth opportunities beyond the Hayward operation’s clinical scope.