BASEL, Switzerland—In an effort to secure its long-term manufacturing capacity for biotech cancer drugs, Roche in September bought a Singapore-based biologics plant from fellow Basel-headquartered firm Lonza for approximately $290 million, plus additional milestone payments of $70 million. The deal was secured through Genentech Singapore Pte. Ltd., a wholly owned member of the Roche Group that elected to exercise an option for purchasing Lonza's cell culture biologic manufacturing facility.
The option was part of a 2006 agreement that would have seen Lonza manufacture the active pharmaceutical ingredient for Avastin (bevacizumab) on a contractual basis.
The facility, which is said to be "mechanically complete," will be merged with Genentech Singapore's existing biologic manufacturing facility. In addition, as part of the integration between Roche's and Genentech's combined technical operations—part of the ongoing process of merging Genentech, which Roche acquired in March, into the larger Roche Group—the biotechnology production facilities in Singapore currently operating under the Genentech name will later this year operate under the name of Roche Singapore Technical Operations.
The exercise of the purchase option, and the resulting merger of operations under the existing Genentech structure, will add some 230 Lonza employees to the existing Genentech Singapore Technical Operations, for a total headcount of approximately 325 people.
According to Jim Miller, vice president and general manager of Genentech Singapore, the combined Singapore operations "will play a key role in Roche's global manufacturing network" and the operations acquired from Lonza are intended right now in particular for production of bulk drug substance for Avastin, in line with the original purpose under the 2006 deal with Lonza. Given that Roche exercised its purchase option on the Lonza facility well ahead of a 2012 deadline, this may be a sign of confidence in—and preparation for—the U.S. Food and Drug Administration's future clearance to produce Avastin, which is expected next year. Some industry watchers have suggested that this is also a sign of Roche's desire to more completely secure biologics capacity after acquiring Genentech.
"We are very pleased to exercise our option to purchase from Lonza the biologic manufacturing facility [it] built and to combine it with our current production plant in Singapore," Miller says. "As part of our globally integrated Genentech and Roche manufacturing network, this world-class operation in Singapore will play a major role in bringing important medicines to the patients who need them.
"We are happy to have built and handed over a state-of-the-art facility to Genentech and to close the project both on time and on budget, says Mike Brown, vice president of operations for Lonza Biologics Singapore, who notes that the handover was characterized by "mutual respect and professionalism" and went quite smoothly. "We believe Lonza successfully proved its engineering capabilities and its unique know-how in starting up and operating complex biopharmaceuticals manufacturing facilities.
Miller notes that Lonza has proven to be "a valuable partner in our efforts to build our manufacturing capacity" and he expects that addition of the Lonza employees to Genentech's will represent a useful addition of talent, knowledge and competence. He adds that the "continued support of the Singapore Economic Development Board" also bodes well for future success of Roche's presence in Singapore.
In addition to the Lonza-built plant—with its 80,000 liters of fermentation capacity and its approximately 10 acres at the Tuas Biomedical Park, along with an option for up to 20 additional acres—Genentech Singapore also has an existing 1,000-liter E.colimanufacturing facility in Singapore that is expected to receive FDA licensure for bulk drug production of Lucentis (ranibizumab) for injection in 2010.
Of course, Roche's interest in Asia also goes well beyond Singapore. In May, for example, Roche Applied Science announced the opening of its new Application Support Center in Shanghai, China, part of an increasing trend toward Roche investment in Asia Pacific, as these recent efforts add to earlier ones like the creation of Roche Pharma research and development operations in Shanghai and the Roche Diagnostics Asia Pacific Training Center in Bangkok, Thailand.
Although it gave up 230 employees to Roche's Genentech operations in the purchase option deal, Lonza continues to employ more than 80 people working at its own large-scale mammalian manufacturing plant, process development facility and cell therapy unit—also in Singapore—which it is building up and plans to bring fully on-stream in 2011. Lonza reports that it intends to increase the number of employees at that plan to more than 300 employees over the next year or so.
Lonza notes that Singapore is an ideal location for complex biologics manufacture due to a committed workforce, excellent education system, competitive cost position and strong intellectual property protection laws.