By Editorial Team for CPhI Worldwide Special - By Adam Bradbury, Analyst, GlobalData PharmSource
Increasing private equity investment and the race for biologics and specialized capabilities drive the CMO industry’s M&A activity.This exclusive article has been adapted fromthe 2021 CPhI Worldwide Annual Report, which is released at the event (Fiera Milano, Italy, November 9-11, 2021)and includes a comprehensive analysis来自领先的行业专家有关药品的关键趋势和未来创新。
Private equity (PE) firms have recently shown an increasing appetite for contract manufacturing organizations (CMOs) with rapidly increasing investments in the CMO industry. PE firms now own many of the world’s leading CMOs, such as Recipharm, Cambrex Corporation, and PCI Pharma Services. Besides the large volume of acquisitions, values in recent PE-related deals are also remarkably high. In December 2020, EQT IX Fund, through Roar BidCo AB, agreed to acquire Recipharm AB, one of the largest dose CMOs, for approximately $2.1 billion. Lars Back sell, Chairman of the Board of Recipharm, and Thomas Eldered, Board Member and Chief Executive Officer of Recipharm, are shareholders of Recipharm and participated with EQT IX in the offer.
根据特朗普总统在美国通过的2017年《税收和就业法》，降低了公司税率并增加了PE公司的支出能力，从而导致CMO行业的投资水平不断上升。根据GlobalData的M&A in the Contract Manufacturing Industry: Implications and Outlook – 2021 Editionreport, the most common type of acquirer was PE firms, which increasingly view the CMO industry as a prudent choice to provide a good return on investment. This group rose to the top among acquirers during 2018-2020, compared to four years earlier when they were in third place. More PE firms were buying than selling, indicating a strong investor appetite.
PE公司收购了近70家制药合同制造公司，并在2018 - 2020年期间收购了PE支持的CMO。PE公司最常见的是活跃的药品成分（API），生物制剂和多功能服务CMO。这些服务类型具有很高的价值，最有可能以后出售以获利。供应链中断和大规模疫苗生产问题意味着目前CMO有很大的机会，它们代表了PE公司特别谨慎的投资机会。图1显示了与私募股权投资，资产交易和合并等其他交易相比，CMO领域的采集活动程度。
数字1:CMO merger and acquisition (M&A) activity, 2018-2020。（资料来源：GlobalData，Pharma Intelligence Center Deals数据库（2021年4月20日访问）©GlobalData）
Specialist CMOs are experiencing increasing levels of acquisition as time goes on. During 2015-2017, acquired companies with specialized services accounted for 28% of deals, which grew to 33% during 2018-2020. Standard offering acquisitions decreased to 44% from 50% between 2015-2017 and 2018-2020. These trends suggest that PE firms are increasingly targeting companies with sophisticated capabilities to cope with the challenges of manufacturing modern drugs. There is evidence of this continuing into 2021, when Murano Bidco, an affiliate of PE giant Carlyle Group, acquired Vectura Group in May 2021 for $1.4 billion. Vectura develops inhalation products through an integrated inhaled drug delivery platform and demand for this specialist dosage form, inhaled drugs, may become more of a theme as the COVID-19 pandemic progresses, as many survivors suffer from long-term decreased lung capacity.
FDA approvals requiring special handling have generally increased in recent years. This trend bodes well for CMOs with specialist high-containment capabilities, as the regulations for associated facilities can be onerous and out of reach for small and mid-sized companies. As molecules become more complex, future production will require enhanced technologies for the expression, development, and manufacture of these molecules.
GlobalData’sNew Drug Approvals and Their Contract Manufacture – 2021 Editionreport showed that the FDA approved more biologic New Molecular Entities (NMEs) in 2020 than in any other year in the previous decade. Simultaneously, sponsors increased the outsourcing of the manufacture of active biologics. However, as pipeline and marketed biologics increase in both complexity and number, most CMOs remain unable to manufacture biologic APIs to meet sponsor companies’ needs.Unfortunately for CMOs, larger companies tend to invest in developing their own internal manufacturing capabilities to manufacture drugs rather than outsource production. However, they do frequently dual source to mitigate risk and for other strategic reasons.
COVID-19 vaccines and advanced therapy medicinal product (ATMP) manufacturing are heavily outsourced due to scale or technical expertise difficulties. CMOs can benefit from investing in capabilities and expertise (where they have the means to do so) to produce and handle sensitive biologics, as the marketed drugs landscape will become increasingly flooded with these in coming years.
Cell and gene therapy-related acquisitions are currently in high demand and highly valued, with some of the largest CMOs being involved in these acquisitions, such as Catalent acquiring both MaSTherCell and Paragon Bioservices, for $315 million and $1.2 billion, respectively. At the same time, Massachusetts-based Thermo Fisher Scientific Inc, another leading CMO, completed its acquisition of Brammer Bio LLC, a viral vector contract development and manufacturing organization (CDMO), for $1.7 billion, while contract research organization Charles River Laboratories acquired Cognate BioServices, a cell and gene therapy CDMO, in a high-value deal in March 2021 worth $875 million.
资料来源：GlobalData，Pharma Intelligence Center交易数据库和合同服务提供商数据库（2021年4月20日访问）©GlobalData
Note: Standard service offerings and processing technologies are common to the industry and not differentiated. Specialized service offerings use standard technologies but are applied in more complex products (excluding biologics), such as the manufacture of controlled or highly potent substances. Biologic service offerings and process technologies are not broadly available and are used for biologic drug categories such as monoclonal antibodies, proteins, peptides, gene therapies, or cell therapie
Future outlook: factors at play
The COVID-19 pandemic has led to investor hesitancy, even when it comes to M&A activity. However, some of the largest CMOs will continue to acquire to enhance their capabilities or scale of production in the future. Even during the height of the COVID-19 pandemic in 2020, large CMOs acquired companies, not only for high-profile capabilities such as gene and cell therapy manufacturing but also for more traditional commercial dose manufacturing services. There is no reason why this M&A activity cannot continue over the next two to three years.COVID-19 vaccine developers signed contract manufacturing agreements at an unprecedented rate during 2020 because many of these sponsors are small companies or non-profit institutions that lack manufacturing capabilities. Even the largest companies require extra capacity to supply billions of doses. Despite many developed markets vaccinating the majority of their populations, vaccine production will still remain in high demand for the foreseeable future.
Experts, including Andy Slavitt, former senior pandemic advisor to President Biden, have raised the possibility that patients who received the Johnson & Johnson or AstraZeneca recombinant vector vaccines may require an additional messenger ribonucleic acid (mRNA) vaccine shot due to the increasing prevalence of the more contagious Delta coronavirus variant, which studies suggest the Pfizer vaccine offers better protection against it.
这些额外的剂量将带来更多的高度specialized work, with CMOs making these novel molecules.It will also put pressure on the world’s supply chains. Other developments could push volumes even higher, including the fact that companies are currently trialing vaccinations in children and the likelihood that one or more vaccines or therapies currently in clinical development will be approved. If these candidates are found to be safe and efficacious, there will likely be a rapid increase in the number of contract manufacturing agreements.
- GlobalData (2021a) M&A in the Contract Manufacturing Industry: Implications and Outlook – 2021 Edition, GDPS0037MAR.
- GlobalData (2021b) New Drug Approvals and Their Contract Manufacture – 2021 Edition, GDPS0035MAR.
- GlobalData (2021d) FDA OKs Third Dose for Pfizer and Moderna COVID-19 Vaccines: What Does It Mean for Manufacturing?,GDHC4122EI.
- GlobalData (2021e) BIO 2021: mRNA Vaccine Booster Shots for COVID-19 and Increasing Uptake Will Offer CMOs Lucrative Opportunities, GDHC4050EI.
- GlobalData (2021f) Rising Innovative Biologic Approvals Spell API Manufacturing Opportunities, GDHC3898EI.
- GlobalData（2018）合同制造业的并购：含义和前景 - 2018年版，GDPS0024MAR。
The ninth edition of the CPhI Annual Report – a comprehensive report analyzing key trends and innovations in pharma – was commissioned by Informa Markets and will be从ww可供下载w.cphi-online.com during CPhI Worldwide, which is being held at Fiera Milano, Milan, Italy, November 9-11, 2021.