A company that makes drug-delivery and development technology is making a big bet on the projected future growth of gene therapy in the US.
Somerset, New Jersey-based Catalent said Monday it would acquire Paragon Bioservices, a Baltimore-based contract manufacturing organization focused on viral vectors used in gene therapies, for $1.2 billion. The companies estimate that Paragon will have the ability to capitalize on a gene therapy market worth up to $40 billion, particularly with its expertise in adeno-associated viral, or AAV vectors, which are the most commonly used delivery system for gene therapy. It also has capabilities in lentiviral vectors and GMP plasmids.
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The deal comes just weeks after scientific research products manufacturer Thermo Fisher said it would buy another gene therapy-focused contract manufacturer, Cambridge, Massachusetts-based Brammer Bio, for $1.7 billion.
“Paragon’s unparalleled expertise in the rapidly growing market of gene therapy manufacturing will be a transformative addition to our business that we believe will accelerate our long-term growth,” Catalent CEO John Chiminski said in a statement. “Paragon brings to Catalent a complementary capability that will fundamentally enhance our biologics business and our end-to-end integrated biopharmaceutical solutions for customers.”
The only gene therapy currently marketed in the US, Spark Therapeutics’ Luxturna (voretigene neparvovec-rzyl), for a rare form of inherited blindness, is an AAV-based product, as are most of the gene therapies currently in clinical development. Meanwhile, bluebird bio’s Zynteglo, under consideration by the European Commission for approval in the blood disorder beta-thalassemia, is a lentiviral-based therapy.
Bluebird has a longstanding relationship with another contract manufacturer that does work in gene therapy, Switzerland-based Lonza, and recently opened its own manufacturing plant for gene and also cell therapies. At an investor conference in New York last month, panelists in a discussion about manufacturing mostly agreed that in-house manufacturing is preferable to reliance on contract manufacturers. Speakers in a panel at the B. Riley Healthcare Conference in September voiced similar opinions, saying that in-house manufacturing allows for greater flexibility and lowers long-term costs. By contrast, reliance on contract manufacturers is common in the early stages of development, but the need for scale – especially in later stages of development and commercialization – requires a transition to companies manufacturing products themselves.
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