The Swiss contract development and manufacturing organization will more than double its U.S. footprint by acquiring the Merck KGaA plants.
Lonza has struck a deal to buy five U.S. manufacturing plants from Merck KGaA at a valuation ranging in the low- to mid-triple-digit millions in Swiss francs.
Responding to an analyst on a conference call Tuesday, Lonza CEO Wolfgang Wienand said somewhere in the middle of the CHF 100 million ($122 million) to CHF 600 million ($732 million) range “would be roundabout the right view on the acquisition price.” In return, Lonza will acquire U.S. production sites specializing in bioconjugation, payload-linkers and viral vectors.
“We view this as another highly attractive strategic acquisition for Lonza that meaningfully strengthens its competitive positioning across several attractive, high-growth modalities, positioning it well for its next leg of growth,” William Blair analysts said in a Tuesday morning note to investors.
Buying Merck KGaA’s bioconjugate plant in St. Louis, Missouri, and high-potency payload-linker facilities in Madison and Verona, Wisconsin, will strengthen Lonza’s antibody-drug conjugate (ADC) production capabilities. Currently, Lonza’s ADC capabilities center on its site in Visp, Switzerland. Lonza is also buying Merck KGaA’s viral vector plant in Carlsbad, California, and aseptic fill-finish site in Indianapolis, Indiana.
About 1,100 employees will transfer to Lonza as part of the deal. Lonza, which will employ more than 6,000 people across nine U.S. sites once the deal closes, expects the acquired facilities to contribute about CHF 250 million ($305 million) in sales in 2028.
While the facilities will initially be less profitable than Lonza is today, the contract manufacturer expects to bring margins in line with the rest of its business by the time the Merck KGaA sites reach peak sales in the mid-2030s. Lonza’s belief that it can grow sales at the plants rests on its assessment of capacity use and forecasts for market growth.
Capacity utilization is “way below the level we believe can be achieved,” Wienand said. By integrating the sites into the Lonza network, the CEO expects to “broaden the customer pipeline, increase utilization and progressively increase sales and profitability.”
Lonza expects the global bioconjugation market to grow from around $30 billion today to around $110 billion by 2033, Wienand said. Establishing end-to-end drug substance manufacturing for ADCs in the U.S. will enable Lonza to engage customers earlier, work on more programs and provide clinical and commercial-scale production options on both sides of the Atlantic, the CEO added.
When Lonza acquired a U.S. plant from Roche in 2024, it agreed to supply the drugs that the pharma company produced at the site. The Merck KGaA deal is different. Christian Seufert, head of advanced synthesis at Lonza, advised an analyst against assuming that there is a contract in place with Merck KGaA, noting that “the business was primarily focused on third-party sales and third-party revenue.”
There was an almost three-year gap between the Roche and Merck KGaA deals, but Wienand said Lonza “will not hesitate” to act if it finds an attractive takeover target while integrating the five U.S. sites. The company has the bandwidth to work on deals in parallel to the Merck KGaA agreement, which it expects to close in mid-2027.
