Strategic acquisition of GMP biopharmaceutical manufacturing capability in the USA extends service and technology offering, enables the capture of more value from projects, and provides wider cross-selling opportunities across the Group
Cambridge, UK and San Diego, CA, USA – 14 September 2015: Abzena plc (AIM: ABZA), the life sciences company providing services and technologies to enable better biopharmaceutical products, has acquired PacificGMP, a privately held contract biopharmaceutical development and manufacturing company (CDMO) based in San Diego, CA, USA.
The acquisition of PacificGMP is in line with Abzena’s strategy to expand its offering and provides the opportunity to capture more value through broader support for its partners’ development projects and enables cross-selling of its services and technologies. The acquisition is expected to immediately enhance the earnings of the Group, before amortization of acquired intangible assets. In the 12 months to July 2015 PacificGMP generated revenues in accordance with the IFRS principles of $3.0 million (£1.9 million).
Abzena is acquiring the entire issued share capital of PacificGMP, including settlement of the non-trading liabilities of PacificGMP at completion, for a cash consideration of $7.7 million (£4.98 million), from existing cash resources, and warrants over 564,762 Abzena shares with an aggregate value of $0.7 million (approx. £0.5 million) based on the average price of Abzena shares over the 60 trading days prior to closing. The warrants represent 0.58% of the current issued share capital of Abzena and are exercisable for up to three years from issue at an exercise price of £0.80 per share.
A performance-based incentive scheme, which could provide up to a maximum of 5,129,939 Abzena ordinary shares (5.3% of the current issued share capital) to PacificGMP’s executives and key managers, depending on the performance of the business over the next two years, has been established.
PacificGMP provides contract process development and manufacture of biopharmaceuticals, including monoclonal antibodies, recombinant proteins, vaccines, and gene therapy and cell therapy products, for a growing international customer base. PacificGMP was founded in 2005 and is a pioneer in the adoption of single-use manufacturing technology, which is increasingly being used to manufacture biopharmaceuticals. Its service offering includes process and analytical development, non-GMP and cGMP manufacturing, and regulatory support.
Rationale for the acquisition: • Enables Abzena to pursue opportunities to take its clients’ projects further along the development pathway so it can capture more economic value
• Adds a further significant line of service revenue with a positive effect on Group earnings
• Provides additional opportunities for Abzena to increase revenue through cross-selling its services and technologies
• Increases Abzena’s penetration beyond its existing manufacturing cell line development offering into the growing contract biopharmaceutical manufacturing market, which is forecast to reach $3.1bn in 2016
• Enables Abzena to provide additional support for the development of products based on Abzena’s proprietary Composite Human Antibody™ protein engineering and ThioBridge™ ADC bioconjugation technologies, therefore driving further adoption of these technologies
• Provides an operational base in the US, within the major San Diego area biotech hub, to build and support Abzena’s international business. PacificGMP will allow Abzena to develop stronger links with its customers in North America and the Asia-Pacific area and to access a network of US West Coast biopharmaceutical companies and academic institutions
• Adds an experienced management team and skilled workforce with industry experience across process development, single-use technology for GMP manufacture and regulatory compliance
• Provides an opportunity to offer PacificGMP’s manufacturing services for later stage clinical programmes and niche commercial-scale manufacturing through investment in the expansion of PacificGMP’s facility
• Provides a platform for further expansion of the Abzena group through acquisition of additional complementary services and technologies.
On completion of the acquisition, PacificGMP will operate as an integrated member of the Abzena group of companies, which includes Antitope and PolyTherics. Gary Pierce, CEO and General Counsel of PacificGMP, has become President, PacificGMP and Leigh Pierce, PacificGMP’s President and CSO, has become Chief Technology Officer (Biomanufacturing), both reporting directly to John Burt, CEO of Abzena.
Gary Pierce, President of PacificGMP, commented: “Over the 10 years since founding PacificGMP, we have been fortunate to work on a broad array of exciting and complex projects with some of the leading physicians and researchers in the biotechnology arena. We’ve been able to bring our expertise in development and manufacturing to challenging large molecules and to support efforts against many life-threatening and debilitating diseases. We believe that joining Abzena will allow us to build on that capability, helping our partners to reach larger and more diverse populations and enable the development of new therapies, cures and vaccines. We’re very excited by Abzena’s vision of enabling better biopharmaceutical products by creating an international business with a broad, integrated service and technology offering that can support product development all the way from lead selection through to manufacturing for clinical trials. I believe that the incorporation of PacificGMP’s biomanufacturing capability will prove highly attractive to a range of R&D organisations and we look forward to a promising future as part of the Abzena group.”
John Burt, CEO of Abzena, added: “PacificGMP provides us with an ideal opportunity to expand our service offering into the high growth biopharmaceutical manufacturing arena and to establish an operational footprint in the US. This acquisition allows us to capture more customer value, provides significant cross-selling opportunities, and is expected to enhance the pace of adoption of Abzena’s technologies. We are delighted to welcome PacificGMP and its staff into the Abzena family.”
Further details of the acquisition
• The Share Purchase Agreement for the acquisition of the issued share capital of PacificGMP was executed between PacificGMP’s shareholders and Abzena Inc. (a wholly owned subsidiary of Abzena plc) on 11 September 2015. The acquisition completed on the same day
• PacificGMP’s revenue was $3.0 million (£1.9 million) and the net loss for PacificGMP was $0.1 million (approx. £0.1 million) in the year to 31 July 2015 (unaudited results prepared in accordance with IFRS principles)
• PacificGMP had net liabilities of $1.2 million (£0.8 million) as at 31 July 2015 (unaudited results prepared in accordance with IFRS principles)
• The sum of $1.8 million of the total cash consideration of $7.7 million was used to settle shareholder loans and contingent liabilities crystallised by the sale of the share capital
• PacificGMP has 37 employees, all based at PacificGMP’s facility in San Diego
• On completion of the acquisition, the non-executive directors of PacificGMP have resigned from the board and John Burt (CEO), Julian Smith (CFO) and Jim Mills (Vice President, Technical Operations) have been appointed as directors of PacificGMP alongside Leigh Pierce and Gary Pierce. There are no changes to the board of directors of Abzena plc arising from this transaction
• PacificGMP has executed a new lease agreement to expand the facility in San Diego from 14,000 to 23,400 sq. ft. to provide a total of five manufacturing clean room suites, as well as additional analytical and process development laboratories
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For more information, please contact:
John Burt (Chief Executive Officer)
Julian Smith (Chief Financial Officer)
Abzena plc
Tel: +44 1223 903498
Email: john.burt@abzena.com or julian.smith@abzena.com
Christopher Golden and Ivonne Cantu
Cenkos Securities (Nominated Adviser and Broker)
Tel: +44 20 7397 8900
Mark Swallow and David Dible
Citigate Dewe Rogerson (Corporate and Financial PR)
Tel: +44 20 7638 9571
Email: abzena@citigatedr.co.uk
About Abzena
Abzena provides proprietary technologies and complementary services in the UK and US to enable the development and manufacture of biopharmaceuticals.
The Group comprises Antitope, PolyTherics and PacificGMP, which between them have built a global customer base including the majority of the top 20 biopharmaceutical companies as well as large and small biotech companies and academic groups.
Antitope provides immunogenicity assessment, protein engineering to create humanized antibodies and deimmunised therapeutic proteins, and cell line development for manufacture.
PacificGMP provides contract process development and manufacture of biopharmaceuticals, including monoclonal antibodies, recombinant proteins, vaccines, and gene therapy and cell therapy products, for preclinical and clinical studies.
PolyTherics specializes in proprietary site-specific conjugation technologies for antibody drug conjugate development and solutions for optimizing the therapeutic properties of biopharmaceuticals.
Abzena has its main operations in Cambridge, UK and in San Diego, CA, USA. The shares of Abzena plc are quoted on the AIM segment of the London Stock Exchange under the symbol ABZA.
www.abzena.com
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