SAN DIEGO—Aimed at expanding its pipeline into thebiomedical field while gaining entry into the lucrative contract developmentand manufacturing organization (CDMO) market, Tokyo-based Ajinomoto Co. Inc.has agreed to acquire Althea Technologies Inc., a leading provider ofbiopharmaceutical development and manufacturing services, for $175 million.
The transaction is expected to close this month, at whichpoint Althea will become a fully consolidated subsidiary of Ajinomoto, saidPresident and CEO Masatoshi Ito in a news release.
"Through this acquisition of Althea Technologies, with itstalented management and dedicated employees, Ajinomoto aims to strengthen itsbusiness foundation and expand in the rapidly growing advanced biomedicalfield, in which Ajinomoto aspires, including this acquisition, to achieverevenue of JPY 30 billion by 2020," Ito stated. "The global market size forbiopharmaceutical CDMO is estimated at $2.3 billion, and double-digit growth isexpected."
The merger agreement stipulates that Ajinomoto will acquireall of the capital stock in Althea Technologies. Ito says Ajinomoto iscommitted to continuing to provide the highest quality services to Althea'scustomers.
"Ajinomoto is delighted and honored to have Althea, theirtalented management and employees join our group," Ito stated. "In combiningAjinomoto's experience in biotechnology together with Althea's sophisticatedtechnology, experienced personnel and expertise in cGMP manufacturing, weaspire to expand our business for biopharmaceuticals manufacturing in the U.S.market and strengthen our advanced biomedical businesses."
Rick Hancock, Althea's president and CEO, called thetransaction announcement "a great day for Althea, our employees, our customersand investors."
"During the past several months, I have had the opportunityto get to know members of the Ajinomoto team, and I am convinced that thecombination of our two companies will yield outstanding synergistic benefits.Both companies are dedicated to the highest levels of quality and customercare," Hancock said.
Ajinomoto "is acquiring the entire company and all ofAlthea's business units, including Biologics Development, Fill/Finish,Analytical Development and Stability Testing," Hancock tells ddn.
"One of the great things about this deal is that all of theservices that Althea offers fit perfectly with Ajinomoto's plans for expansioninto biopharmaceutical production," he says.
Ajinomoto has developed a "highly effective alternativebacterial expression system called CORYNEX, and they are actively partneringthis system with biotech and pharma companies," Hancock adds. "They needed aCMO to provide development and cGMP manufacturing capabilities to move theseprojects forward. I anticipate that as a result of the acquisition, we will seeexpansion in all of the Althea business units.
"Another thing we all love about this deal is that theentire team of employees will stay together, including all of seniormanagement," Hancock continues. "Ajinomoto was looking for more than just a CMOwith exceptional facilities, a great quality record and innovative technology."Ajinomoto "also wanted to partner with an experienced team that haddemonstrated the ability to run a successful contract manufacturing businessand deliver high-quality products to a wide variety of clients," he adds. "Wealso look forward to welcoming employees from the Ajinomoto family of companieswho have unique experience and expertise that can help us grow and add newservices. The name of the new company will be Ajinomoto Althea."
There are several ways the combination of Althea andAjinomoto will be synergistic, Hancock says. Not only will Althea have accessto the CORYNEX platform, which has advantages over the currently bacterialsystems used to produce biopharmaceuticals, but it is a gram-positive,non-sporulating, Corynebacterium that expresses target proteins at high purity.
"So there is a reduced endotoxin burden, a much simpler purificationand no need for refolding," Hancock says. "In addition, Corynebacterium hasbeen used in the food industry for several decades, so the safety profile iswell established. Plus, we will be able to work with Ajinomoto's clients andoffer CORYNEX to our existing biologics customer base. Our North American Salesand Marketing group will now have access to markets in Japan and Asia, whereAjinomoto is a very highly respected company and a household name. As part ofthe Ajinomoto family of companies, we will also work closely with otherbusiness development teams in the U.S. and Europe."