Lonza Buys Roche Site for $1.2 Billion to Bolster Biologics

(Bloomberg) — Lonza Group AG agreed to buy a manufacturing facility in the US from Roche Holding AG for $1.2 billion, adding production capacity in the rapidly growing field of biologic medicines.

The facility in Vacaville, California, is one of the largest biologics manufacturing sites in the world by volume and will complement Lonza’s own site on the East Coast, the company said in a statement on Wednesday. Approximately 750 employees at the facility will be offered employment by Lonza and the products currently produced there by Roche will continue to be supplied by Lonza for a transition period.

Lonza’s biologics division, which supplies bespoke antibodies and proteins to major drugmakers, is its fastest-growing business, with sales of 3.7 billion francs last year. Roche, which acquired the site as part of its 2009 buyout of Genentech, said last year it was looking to sell or vacate it by 2029. Monoclonal antibodies, including Roche’s cancer drugs Herceptin and Avastin, have been produced there.

“The Vacaville site is a highly valuable strategic acquisition that will make capacity immediately available for our customers and unlock future growth for our Biologics division,” said Jean-Christophe Hyvert, the head of Lonza’s biologics division.

Lonza increased its medium-term sales guidance on the back of the deal, saying it now expects compound annual growth in constant exchange rates of 12% to 15% from 2024 to 2028, compared with its previous forecast of 11% to 13% growth. The company plans to invest around 500 million Swiss francs ($562 million) to upgrade the site, it said. 

Lonza shares rose to the highest intraday level since July 31 in early trading in Zurich. The stock was up 4.5% at 503.8 francs as of 9:04 a.m. after rising as much as 5%. Roche rose 0.1%.

(Updates with share trading, site history)

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