Merck buys Avecia to boost biomanufacturing
pharmafile | December 21, 2009 | News story | Manufacturing and Production, Research and Development | Avecia Biologics, Cobra, Merck & Co, Recipharm
Merck & Co has bolstered its capabilities in biologics production with the acquisition of contract manufacturer Avecia Biologics.
The deal for the UK-based company includes its process development and scale-up, manufacturing, quality and business support operations located in Billingham, Tees Valley, which has seen more than $150 million in investment in the last few years.
Merck said the deal was an important part of its strategy of expanding its biologics capabilities. Earlier this year it acquired Insmed’s bioprocessing facility in Colorado, USA, along with a pipeline of follow-on biologics.
The drugmaker said it would acquire the business through its UK subsidiary Merck Sharp & Dohme Limited (MSD). Terms of the transaction have not been revealed.
At the heart of the deal is Avecia’s protein expression system, known as pAVEway, which cuts the time and cost of biologic development and production and can be applied to microbial fermentation in bacteria, yeast and potentially even mammalian cell culture.
A US arm of Avecia based in the US and specialising in the development and supply of oligonucleotides is not part of the transaction.
The agreement provides the pharma giant with a facility staffed by an experienced, highly skilled workforce, according to John McCubbins, senior vice president of biologics and therapeutic protein operations at Merck, who said his company has worked with Avecia before on development and supply of biologics.
“At Merck, we continue to execute on our strategy of expanding our biopharmaceutical expertise and manufacturing capacity,’’ McCubbins added.
The Avecia brand will also be retained, at least in the near-term, according the two companies, and it is understood that no job losses are anticipated as a result of the change in ownership. Meanwhile, Merck said it would honour all the biologic manufacturer’s “contractual commitments”.
Taking a contract manufacturer into the hands of a pharmaceutical company could raise potential conflict of interest issues. Merck says it will “engage in discussions with individual customers relating to their specific ongoing and future biological process development and manufacturing needs after the transaction is closed”.
Cobra bought by Recipharm
Meanwhile, another UK-based contract manufacturer specialising in biological drugs is also set to change hands, following the announcement that Sweden’s Recipharm has made an offer to acquire Cobra.
The troubled firm has been in financial difficulties as a result of delays in securing manufacturing contracts, and said recently it does not have sufficient working capital for its current purposes. Recipharm has a history of rescuing troubled firms. In 2007 it snapped up another UK contract manufacturer, Ashton Pharma, after US parent Inyx went into administration.
“It is envisaged that Recipharm will loan monies on normal commercial terms … during the integration of the Recipharm and Cobra businesses,” said the UK firm in a statement.
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