Agreements were made on consecutive days in mid-December that should see two major biologics facilities in the UK change hands. Merck & Co. reached a definitive agreement to acquire the Avecia Biologics facility in Billingham on Teesside via its European affiliate Merck Sharp & Dohme (Holdings) just after Swedish CDMO Recipharm made a 2.25p/share offer for privately owned Cobra Biomanufacturing, which has facilities in Oxford and Keele.

Under the terms agreed, Merck will acquire Avecia Biologics and all of its assets, including process development and scale-up, manufacturing, quality and business support operations. As well as supplying its own internal needs, it will honour existing third party contracts and will also begin discussions with customers on their future needs once the deal has closed.

The follows an initial strategic development and supply relationship with Avecia Biologics, a CMO specialising in microbial-derived biologics. John McCubbins, senior vice president of biologics and therapeutic protein operations in Merck’s manufacturing division, said that it would “provide us with an operational facility staffed by an experienced workforce that is highly skilled in a broad portfolio of bioprocess systems”.

Financial details were not disclosed and closing is subject to regulatory approval and customary closing conditions. It does not include Avecia’s Oligomedicines business in the US, which is now the sole remaining part of the former fine and speciality chemicals operation that emerged from the break-up of ICI in the mid-1990s.

Separately, Merck has taken an exclusive worldwide license to use the Pseudomonas-fluorescens-based expression technology of Pfenex for use in developing an undisclosed vaccine. This could be worth up to $52 million in total payments, one of the biotech industry’s largest gene expression technology-licensing deals, plus potential royalties on commercialised products.

Based in San Diego and previously operated through Dowpharma, Pfenex was spun off as an independent company from Dow Chemical in a $24 million in an initial round of venture funding in early December led by Signet Healthcare Partners and Dow Venture Capital on behalf of Dow, which will continue to hold a minority stake.
The firm has about 20 employees and this is its second commercial licence. The first licensee is believed to be Pfizer, which revealed plans to work with Dowpharma on an unnamed protein-based drug in 2005. No further details were ever disclosed.

The Pfenex Expression Technology is based on modified strains of P. fluorescens in a fermentation process. This uses high throughput, parallel processing methodologies to make various protein biotherapeutics, including drugs, vaccines, and diagnostic reagents more cheaply than would be possible with mammalian cell cultures.

Recipharm, meanwhile, intends to buy Cobra, which contract manufactures proteins, virus, DNA and cells for the development of drugs and vaccines, notably the patented Ort/Ort-Vac platform for antibiotic-free maintenance therapy and high dosage oral vaccine delivery, the Xer-cise chromosomal modification technology and the MaxXpress maximum protein expression system, which is based on UCOE technology.

Recipharm, which has nine main manufacturing facilities in Sweden, France, the UK and Switzerland, currently makes multiple dosage forms including solid dose, granulates and powders, sterile liquids and lyophiles semi solids, beta-lactams, hormones and dry powder inhalers for the pharmaceuticals industry. It will add up to six more employees at the Keele facility.

The company said that this buy “will considerably broaden” its biologics offering, doubling it in size. It should also provided access to new markets and technologies for use in pre-clinical to Phase II clinical trials. In the longer term, Recipharm plans to expand further to offer higher volume GMP manufacture of biologics at commercial scale.

Thomas Eldered, CEO and managing director of Recipharm, said that this buy was “yet another example of our stated goal to develop world-class development and manufacturing solutions for the biopharmaceutical industry. This operation will run alongside our existing biologics facility in Sweden and complements very well our established capabilities in small molecules,” he added.

In noting the offer, the Cobra board commented that trading conditions remain very challenging because of continued delays in getting contracts signed, which has left it without enough working capital for its current purposes. In accordance with the City Code, Recipharm is expected to make loans to Cobra on normal commercial terms to enable it to meet these requirements during the integration process.

Cobra CEO Simon Saxby described the acquisition as “a welcome and essential step in order for Cobra to be able to provide long-term stability and the increased scale needed for our clients. The combined firm will be able to compete more effectively in the global biomanufacturing market, he added.