Lonza to Acquire Genentech Biologics Manufacturing Site for $1.2 Billion

Lonza, a prominent supplier to the pharmaceutical, healthcare, and life science industries, has announced its agreement to acquire the Genentech large-scale biologics manufacturing site in Vacaville, California, from Roche for $1.2 billion.

This strategic move underscores Lonza’s commitment to expanding its presence in the biologics manufacturing sector and enhancing its capabilities to meet the growing demand for advanced therapies.

The Vacaville facility boasts an impressive total bioreactor capacity of approximately 330,000 liters, positioning it as one of the largest biologics manufacturing sites globally by volume.

With this acquisition, Lonza aims to capitalize on the site’s infrastructure and expertise to bolster its production capacity and cater to the evolving needs of the biopharmaceutical market.

Investment and Expansion Plans

Lonza intends to invest approximately 500 million Swiss francs in additional capital expenditure (CAPEX) to modernize and upgrade the Vacaville facility.

Lonza intends to invest approximately 500 million Swiss francs in additional capital expenditure (CAPEX) to modernize and upgrade the Vacaville facility.
Lonza intends to invest approximately 500 million Swiss francs in additional capital expenditure (CAPEX) to modernize and upgrade the Vacaville facility. (Credits: BCC)

These investments will be directed towards enhancing capabilities to support the production of the next generation of mammalian biologics therapies.

The company seeks to optimize manufacturing processes and drive efficiency across its operations by leveraging the site’s existing infrastructure and Lonza’s operational expertise.

Lonza is committed to retaining the talent and expertise of approximately 750 Genentech employees currently employed at the Vacaville facility.

This move not only ensures continuity in operations but also underscores Lonza’s dedication to fostering a skilled workforce and maintaining a seamless transition process.

Financial Outlook and Growth Projections

The transaction is expected to close in the second half of 2024, pending regulatory approvals and customary closing conditions.

While the Mid-Term Guidance for CORE EBITDA margin and return on invested capital (ROIC) remains unchanged, Lonza's updated sales growth projections
The Mid-Term Guidance for CORE EBITDA margin (Credits: Economic Times)

Lonza anticipates that the acquisition will contribute positively to its sales growth trajectory.

The company has revised its Mid-Term Guidance for the years 2024 to 2028, with the sales growth range now projected to be between 12% and 15% on a compound annual growth rate (CAGR) basis in constant exchange rates (CER).

While the Mid-Term Guidance for CORE EBITDA margin and return on invested capital (ROIC) remains unchanged, Lonza’s updated sales growth projections reflect its confidence in the strategic value and growth potential of the Vacaville manufacturing site acquisition.

As Lonza continues to expand its footprint in the biopharmaceutical sector, the company remains committed to driving innovation, delivering value to customers, and advancing global healthcare outcomes.

Jen Garcia
Jen Garcia
Experienced finance and business news writer, exploring market dynamics with insightful analysis and engaging storytelling.
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