Meeting the Demand for Biologics.

Biologics is an incredibly exciting space, with opportunity coming from all corners of the industry.

In recent years, there’s been an accelerated uptake in the production of biologic drugs, thanks to approval processes becoming more accommodating to the innovative nature of biological products and therapies.

This has led to increased investment in the biologics industry, with multiple major pharmaceutical corporations entering the market - building new, state-of-art manufacturing sites and providing cash injections to existing sites via merger and acquisition (M&A) activity.

Demand for biologics is at an all-time high and continuing to rise. To address this, companies have been working hard to increase their manufacturing capacities.

New Manufacturing Sites on the Way

It’s always exciting to learn about new, state of the art biologics manufacturing sites. Back in 2018, AstraZeneca set the standard with its Skr2.5bn ($300m approximately) facility in Södertälje, Sweden, which is used for filling and packaging of protein therapeutics.

However, this January, global healthcare solutions provider, Lonza, opened an equally impressive site in Guangzhou Biopark, China. Built by Cytiva, a global life sciences leader, the 17,000-square-meter site includes 6,500 square meters of lab space and one KUBio modular facility.

Lonza site in Guangzhou Biopark, China

This is Lonza’s first manufacturing site for biologics in China and provides a strategic base to provide its CDMO services throughout the Asia Pacific region.

The Chinese biologics sector’s growth has outpaced global growth, particularly in the last couple of years. According to estimates, the biologics market in China has surged from just under $10 billion in 2012 to over $45 billion in 2020.

With the KUBio and FlexFactory single-use platform now ready for business, Lonza looks well-placed to meet to this rapidly increasing demand.

MSD has also invested in the biologics arm of its business, with a manufacturing facility in Swords, Ireland, expected to be opened later this year.

The new facility is being developed on an existing pre-owned 15-acre site, which formerly housed MSD’s women’s healthcare manufacturing business. The 31,700m² facility will be expanded to a gross floor area of approximately 43,700m² and the existing 13,000m² warehouse will also be extended and transformed for manufacturing operations.

New laboratories and warehouses will be built, with plans to expand existing production and packaging facilities too.

The facility will produce various therapeutics, including immune-oncology treatments and mammalian cell culture-based protein therapeutics. One of the key drugs planned to be manufactured at the new facility is MSD’s oncology drug Keytruda (pembrolizumab).

Having gained an increased number of approvals for multiple indications for Keytruda since its first FDA approval in 2014, the company has seen substantial growth in its sales. The new site aims to meet the increasing demand, supported by current US and German CDMOs, as well as an MSD facility in the Netherlands.

China-based biologics services provider, WuXi Biologics, also has major expansion plans in Ireland, with its new €325m ($394m) biologics drug substance manufacturing facility in Dundalk.

The new facility will be Wuxi Biologics’ first site outside of China and is expected to help accelerate the development of biologics in Europe.

The state-of-the-art manufacturing facility is one of the first and largest green-field pharmaceutical projects by a Chinese company in Ireland. It will feature single-use bioreactors for commercial bio-manufacturing and be equipped with next-generation processing technology.

The facility will be installed with 48,000l fed-batch bioreactors and 6,000l perfusion bioreactors. It will be one of the world’s largest facilities equipped with disposable bioreactors.

M&A Activity

It’s not all about new facilities though. In the past, we have also seen M&As used to secure existing biologics manufacturing sites and increase companies’ biologics output. For example, in 2019, Fujifilm acquired Biogen Manufacturing, a large-scale biologic manufacturing site located in Hillerød near Copenhagen, Denmark.

Fujifilm's Danish biologics manufacturing site

The $890 million deal provided Fujifilm with its fourth biologics facility: a 90,000-L capacity site with six 15,000L bioreactors as well as assembly, labeling and packing capabilities, quality control laboratories and warehouses. 

At the time, this deal was not a surprise. The Japanese company had been steadily adding to its biologics CDMO business via numerous M&As and other investments. However, the following year in 2020, M&A activity slowed with companies adapting to the challenges of COVID-19.

I expect to see activity increase in 2021, with biologics manufacturing hubs remaining an attractive asset. For more information about the life sciences M&A market, read one of our latest articles entitled: “What Does COVID-19 Mean for Life Science M&As?”.

What Next?

Demand for biologics continues to rise and now there is specific focus on production to support COVID-19 vaccination programs globally.

In the UK, Billingham-based Fujifilm Diosynth Biotechnologies is preparing to manufacture the Novavax vaccine (when it is approved by regulators). Meanwhile, in North Staffordshire, Cobra Biologics is manufacturing the Oxford/AstraZeneca vaccine.

Similar projects are going on around the globe, as the world continues to ask for more and more from the biologics industry.

With COVID-19 vaccine production adding to the rising demand for biologics, I expect the industry to thrive over the next 12 month and I’m excited to see how companies adapt and innovate to improve their manufacturing capacities.

For more information about the markets we serve, go to my consultant page.