Somerset, NJ-based CRO Catalent announced it is acquiring Baltimore-based Paragon BioServices for $1.2 billion.
Somerset, NJ-based contract research organization (CRO) Catalent announced it is acquiring Baltimore-based Paragon BioServices for $1.2 billion. Paragon develops and manufactures viral vectors for gene therapies.
Paragon has specialized expertise in adeno-associated virus (AAV) vectors, which are the most common vectors for gene therapies. It also has significant capabilities in GMP plasmids and lentivirus vectors.
“Paragon’s unparalleled expertise in the rapidly growing market of gene therapy manufacturing will be a transformative addition to our business that we believe will accelerate our long-term growth,” stated John Chiminski, Catalent’s chair and chief executive officer. “Paragon brings to Catalent a complementary capability that will fundamentally enhance our biologics business and our end-to-end integrated biopharmaceutical solutions for customers.”
On March 25, Thermo Fisher Scientific acquired gene and cell therapy manufacturer Brammer Bio for $1.7 billion in cash. Brammer Bio is a contract development and manufacturing organization (CDMO) focused on manufacturing viral vectors for gene and cell therapies.
Both of these deals underline how important gene and cell therapies are becoming in the biopharma industry. For example, on Friday, March 22, bluebird bio, headquartered in Cambridge, Mass., announced it was opening its new gene therapy manufacturing facility in Durham, NC. That factory will produce lentiviral vectors for its gene and cell therapies, including bb2121 and bb21217 for multiple myeloma and possibly LentiGlobin for transfusion-dependent beta-thalassemia (TDT) and sickle cell disease.
According to a recent industry report, there are almost 300 gene therapies being developed to treat more than 100 diseases.
Unlike bluebird bio, which is working to handle its vector manufacturing itself, many companies will contract with CROs and CDMOs for their vector manufacturing. In gene therapies, vectors are typically a genetically altered virus that contains human DNA. The virus, often adeno-associated virus (AAV), has the viral DNA or RNA stripped out with the replacement gene intended for the patient inserted. The virus then is injected into the patient, where it infiltrates the cells and inserts the therapeutic DNA into the cells, which integrate them into their genome.
Catalent projects that the gene therapy market is expected to have sustained growth of 25% in the medium term. In the near term, it expects Paragon will represent a small percentage of its business but will over time “meaningfully accelerate its revenue and EBITDA growth over time.” Paragon is expected to bring in more than $200 million this year.
Paragon will remain under the leadership of Pete Buzy and its management team. Paragon has about 380 employees, who will join the Catalent team.
“Our existing investors, NewSpring Health Capital and Camden Partners were extremely supportive in getting us to where we are today,” Buzy stated. “We are excited to join forces with the leading drug development and manufacturing partner in our industry. This transaction will enable us to achieve our next stage of development and expand our capabilities and platform for the benefit of our customers and their patients.”
According to The Wall Street Journal, Catalent had about $2.5 billion in sales in 2018. The company’s chief executive officer John Chiminsky has been working to grow the company’s capabilities in high-growth markets, such as gene and cell therapies, where it currently doesn’t have a strong presence.
In 2018, Catalent acquired Cook Pharmica, based in Bloomington, Indiana, for $950 million. Cook’s expertise is in manufacturing complicated drugs. And in 2018, Catalent acquired UK-based Juniper Pharmaceuticals in order to expand its contract manufacturing.
