Agilent builds its CDMO arm with $925m Biovectra buy
![CDMO capacity](/sites/default/files/styles/x_large/public/2024-07/Biovectra_image.jpg?itok=ypl_7QZA)
Agilent has boosted its contract development and manufacturing organisation (CDMO) capacity with a $925 million deal to buy Biovectra, a Canadian provider of fill-and-finish services and active pharmaceutical ingredients (APIs).
It's a statement of intent from Agilent, whose primary business is lab instrumentation and equipment, suggesting that it intends to grow the outsourcing side of its business, which is currently focused on the production of oligonucleotide and peptide medicines.
In an investor update, the company said buying Biovectra would allow it to expand its presence in fast-growing areas like GLP-1 agonists for weight loss, antibody-drug conjugates (ADCs), and high-potency APIs for cancer, and enhance its current position in oligonucleotide-based gene-editing medicines.
If it goes through, the deal will also bring in capabilities in liquid nanoparticle (LNP) delivery for mRNA medicines stemming from Biovectra's ongoing alliance with Acuitas Therapeutics.
The deal has been financed with a mix of debt and cash, and bolts on a business that made $113 million in revenue last year, and which is predicted to reach $130 million this year.
For comparison, Agilent's turnover was $6.8 billion in fiscal 2023, flat on the prior year, as demand for its lab equipment weakened in the biopharma market – in part due to a tougher financing environment for start-ups – and soft demand in China. Services and consumables were bright spots in its financials, offsetting the decline in instrumentation.
The group's president and chief executive, Padraig McDonnell, said that buying Biovectra will "expand Agilent's end-to-end biopharma offerings into new growth vectors, including workflows that seamlessly integrate analytical instrumentation, consumables, and a wide range of lab services."
Biovectra was a subsidiary of the German pharma group Mallinckrodt before it was acquired by private equity firm HIG Capital in 2019 for $250 million, so Agilent's offer looks set to be a great return for the investment group.
Mike Gallagher, managing director of HIG Capital, said that after the takeover his company had helped Biovectra to expand its capabilities and workforce, as well as create a diversified customer pipeline.
"We believe that Agilent is a first-class organisation that will help Biovectra grow to even greater heights," he added.
The deal, which covers all Biovectra employees and sites in Prince Edward Island and Nova Scotia, is expected to close before the end of the year, subject to the satisfaction of customary regulatory and other closing conditions.
At that point, Biovectra will be absorbed into Agilent's Diagnostics and Genomics Group, which saw revenues grow 3% to $1.4 billion last year.