Thermo Fisher Scientific Inc. (TMO - Free Report) recently closed the acquisition of a drug substance manufacturing site of GlaxoSmithKline plc (GSK - Free Report) in Cork, Ireland much ahead of schedule.
Valued at 90 million euros, the deal was completed following the fulfillment of all required regulatory approvals. The site will enable Thermo Fisher to meet customer demand for the commercial production of complex active pharmaceutical ingredients (APIs). This remains integral to the company’s efforts to expand its pharmaceutical services footprint internationally.
Acquisition in Detail
The Cork plant is known for producing highly specialized APIs, used for treating diseases like pediatric cancer, depression and Parkinson’s. Thermo Fisher informed that the site is equipped with several facilities, which will enable process development, scale-up and physical characterization of APIs.
As stated earlier, following the conclusion of the acquisition, Thermo Fisher will continue to manufacture APIs for GlaxoSmithKline under a multi-year supply agreement and intends to use the manufacturing hub for developing and producing complex APIs for other customers as well.
Undoubtedly, this transaction aligns with Thermo Fisher’s strategy of enhancing the capabilities of its Pharma Services through the right balance of capital investments as well as mergers and acquisitions.
On the deal’s culmination, the site has now been incorporated with the Laboratory Products and Services segment of Thermo Fisher’s Pharma Services business.
In a separate press release, Thermo Fisher noted that the Cork site will join 1300 colleagues across the company’s expanded API network of manufacturing facilities in Florence and Greenville SC; Linz, Austria and Regensburg, Germany. Apart from adding API development and commercial capabilities, this is going to improve Thermo Fisher’s pharma services offering.
Per Mordor Intelligence, the global API market was valued at $165.74 billion in 2018. This is projected to reach $236.7 billion by 2024, witnessing a CAGR of 6.1%. Therefore this acquisition is well-timed for Thermo Fisher.
The API Expansion Plan at a Glance
In 2019, Thermo Fisher plans to invest more than $270 million in expanding its capabilities, capacity and talent globally. In this regard, the company opened a virtual reality training center in North Carolina. It has also announced extension of sterile fill finish sites in Greenville, NC and Monza, Italy; expansion of its clinical trials supply and distribution capabilities in India, Argentina and China; and growth of its new viral vector manufacturing sites in Alachua, FL and Cambridge, MA. The business also plans to launch a viral vector manufacturing facility in Lexington, MA, later this year.
Other Growth Efforts
Among other strategic developments, we make a note of Thermo Fisher acquiring the Advanced Bioprocessing business from Becton, Dickinson and Company (BDX - Free Report) , which is expected to significantly widen the company’s Life Sciences Solutions line of offerings.
This apart, the company has entered into an agreement with Eli Lilly and Company (LLY - Free Report) for developing a companion diagnostic that will use the FDA-approved, next-generation sequencing-based Oncomine Dx Target Test to identify certain non-small cell lung cancer (NSCLC) and thyroid cancer patients who may be treated with Lilly's investigational therapy, LOXO-292.
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