WALTHAM, Mass. & CAMBRIDGE, Mass.—In a move that it says “significantly expands capabilities to support high-growth gene and cell therapy market,” Thermo Fisher Scientific Inc. on March 24 announced that it and Brammer Bio—a contract development and manufacturing organization (CDMO) focused on producing viral vectors for gene and cell therapies—had entered into a definitive agreement under which Thermo will acquire Brammer for approximately $1.7 billion in cash.
“Brammer Bio will be an exciting addition to our pharma services business and will further strengthen Thermo Fisher’s leadership in serving pharma and biotech customers,” said Marc N. Casper, president and CEO of Thermo Fisher Scientific. “Gene therapy is an area of increasing focus for our customers and is fast-evolving given its potential to treat a range of genetic disorders."
Brammer Bio, which has has nearly 600 employees at primary locations in Massachusetts and Florida, is reportedly on track to deliver $250 million of revenue in 2019, with further expectations to exceed the projected market growth rate of 25 percent over the mid-term. Thermo Fisher’s calculations are that adding the CDMO to its family will be accretive to adjusted earnings per share by 10 cents per share in the first full year of ownership.
“The combination of Brammer Bio’s viral vector capabilities with our GMP production expertise and proprietary bioprocessing and cell culture technologies uniquely positions us to partner with our customers to drive the evolution of this incredibly fast-growing market,” continued Casper. “The transaction is perfectly aligned with our mission to enable our customers to make the world healthier, cleaner and safer.”
Added Michel Lagarde, president of Thermo Fisher’s pharma services business: “By leveraging our combined capabilities, along with our commercial scale and customer relationships, we will strengthen our position as a trusted partner to pharma and biotech.”
On the Brammer Bio side of the discussion, co-founders Mark Bamforth (president and CEO), and Dr. Richard Snyder (chief scientific officer) released a statement for the announcement by Thermo that stated, “We are proud to be pioneers in process development and manufacturing of viral vectors. Brammer Bio has executed more than 100 projects to supply first-in-human gene therapy clinical trials and establish commercial-ready processes, and we’re excited to join Thermo Fisher to take our business to the next level. Our teams share a commitment to helping our customers succeed in delivering cutting-edge therapies to patients in need.”
As Mark Terry noted in an article for BioSpace, many companies tend to contract with CDMOs and other contract services organizations to handle their vector manufacturing. After all, as Casper points out, manufacturing capacity and the ability to develop gene therapy drugs in a cost-effective fashion is a big issue. And not everyone wants to go the route of bluebird bio, which announced a couple days before the Thermo Fisher-Brammer Bio news that it was opening a new gene therapy manufacturing facility in Durham, N.C., to produce lentiviral vectors for its gene and cell therapies.
On the analyst side, Zacks Investment Research notes that according to an Allied Market Research report, the global gene therapy market is projected to reach a little more than $4.4 billion by 2023 (from $584 million in 2016)—for a strong compound annual growth rate of 33.3 percent—leading Zacks to note, “This clearly indicates that the latest move by Thermo Fisher is strategically aligned and well timed.”
The merger and acquisition transaction, which is expected to be completed by the end of the second quarter of 2019, is subject to customary closing conditions, including regulatory approvals. Upon completion, Brammer Bio will become part of Thermo Fisher’s pharma services business within its Laboratory Products and Services Segment.