'Drugs from bugs' joint venture

4 Apr 2019

Lonza and Chr. Hansen create a strategic joint venture to become the partner of choice for developing and manufacturing live biotherapeutic products for pharma and biotech customers.

Chr. Hansen Holding and Lonza have signed an agreement to establish a 50/50 joint venture to pioneer the live biotherapeutic products (LBPs) industry and position themselves as the leading CDMO for biotech and pharma customers. The joint venture will be a 50/50 controlled legal entity that will operate from its headquarters in Basel (CH) and have production facilities in Denmark and Switzerland.

'Drugs from bugs' joint venture

Unrivalled and unique

The joint venture brings together best-in-class, complementary capabilities and will be the first CDMO globally to provide a full supply chain that offers manufacturing of bacteria strains for therapeutic use. While Chr. Hansen contributes its extensive know-how in developing, upscaling and manufacturing bacteria strains, Lonza brings strong capabilities in pharma contract manufacturing and outstanding formulation and drug delivery technologies, including the unique enTRinsic capsules.

Furthermore, the joint venture will possess leading competences in handling, characterizing, formulating, manufacturing and encapsulating strict anaerobe bacteria. These competencies under one roof, with seamless exchanges between drug substance and drug product activities, will decrease development timelines and increase the chance of “right-first-time.”

"We need to think differently about how we develop solutions for manufacturing in the microbiome space as we see the potential of this therapeutic area develop,” said Marc Funk, CEO, Lonza Group. “By teaming up with Chr. Hansen, one of the world’s largest producers of bacteria, we are combining expertise that perfectly fits the very specific needs of aspirational companies in the microbiome space. Our customers will be able to draw on the unrivalled skillset of two world experts that master the exacting processes required for production of strict anaerobic microbes through to formulation and dosage forms. We understand the complexities of bringing pharmaceuticals to market, including the evolving regulatory environment and will offer unique development and pharma-grade manufacturing that addresses an unmet need in the industry, enabling customers to deliver therapies for patients.”

“The joint venture is a quantum leap for Chr. Hansen’s human microbiome lighthouse. It’s a great opportunity to utilize our microbial capabilities in the highly attractive LBP industry whilst sticking to our strategy of not becoming a fully-fledged pharma company. Chr. Hansen has more than 145 years of experience in strain development and manufacturing and we are really thrilled to join forces with a leading global company in the pharma CDMO market to become the partner of choice for end-to-end biotherapeutic solutions. The clinical trial supply industry is a rapidly emerging field, not to speak of the very large potential when the first bacteria-based medical products enter the commercial market,” said Mauricio Graber, CEO of Chr. Hansen.

Clinical and commercial demands for LBP offer highly attractive growth prospects

The joint venture targets the emerging pre-clinical and clinical supply industry for LBP with a large upside to serve the ensuing commercial demand, once the first live biotherapeutic products are approved and available for treatment. Given the current number of ongoing pre-clinical to phase III drug trials, the clinical supply industry globally is estimated to reach EUR 150-200 million by 2025. By 2035, the combined clinical and commercial supply industry is estimated to exceed EUR 1 billion.

Pharma-grade production set-up to be established

The phased investment of approximately EUR 90 million will be shared equally between the parties over a period of three years and will be deployed to build cGMP-compliant pharma production capabilities. The joint venture will upgrade existing facilities in Hørsholm (DK) and equip new facilities in Basel (CH) to serve pre-clinical to phase II projects. Further facilities for phase III and commercial manufacturing will be developed as the pipeline matures. Investments follow a stage-gate-process with clearly defined targets. EUR 45 million will be spent initially and an additional EUR 45 million once customer demand for clinical phase III and commercial supply is confirmed. The joint venture is expected to be largely self-funding after the production set-up has been established.

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