Lonza agrees to buy five American plants from Germany's Merck KGaA

MANY MEDICINES are produced by specialist contractors. The company named on the box may invent a treatment and test it, then hire another firm to work out how to manufacture it at scale and to produce the doses. A firm that does both that development work and the manufacturing is called a contract development and manufacturing organization, or CDMO.

Some of these medicines are used to treat cancer. One design uses an antibody, a protein that recognizes a mark on a cell, to carry a toxic drug, known as the payload, to tumor cells. America's National Cancer Institute describes the product as a laboratory-made antibody chemically linked to a drug that marked cells take up, killing them. That combination is an antibody-drug conjugate, or ADC. Because the payload is highly potent, the plants that make it and the chemical linker that attaches it to the antibody have to be designed to handle such compounds safely.

Other new medicines work by delivering a gene into a patient's cells. Viruses already have a natural ability to carry genetic material into cells. America's Food and Drug Administration explains that once a virus has been modified so it can no longer cause infectious disease, it can be used as a vehicle to carry a therapeutic gene. That modified virus is a viral vector. Drugmakers also package some medicines in tiny fat particles, known as lipid nanoparticles.

On November 3rd Lonza, based in Basel, Switzerland, which calls itself the world's leading CDMO, signed a definitive agreement to buy five American manufacturing sites from Merck KGaA of Darmstadt, Germany. This Merck is a different company from the American firm Merck & Co. Merck KGaA says it has the rights to the Merck name in most of the world, and that in the United States and Canada its life-science business operates as MilliporeSigma. Wolfgang Wienand, Lonza's chief executive, said the purchase "will significantly expand our US presence" and that, with high demand for bioconjugates and viral vectors, the acquired sites "will strengthen our ability to support customers from innovation to launch and commercial supply."

The five sites are in four states. The plant in St. Louis, Missouri, makes bioconjugates. The plants in Madison and Verona, Wisconsin, make high-potency payload-linkers, the toxic drug and the chemical that joins it to an antibody. Reuters reported that those Wisconsin sites account for much of the acquired capacity, specialize in key components of targeted cancer therapies, and include facilities designed to handle highly potent compounds. The plant in Carlsbad, California, makes viral vectors, including aseptic fill-finish, the sterile filling of finished doses into vials. The plant in Indianapolis, Indiana, makes lipid nanoparticle, liposome, and PEGylated protein products, also including that sterile filling. Lonza said approximately 1,100 employees will join the company. The purchase expands its American CDMO manufacturing footprint from four sites to nine and will take its American workforce to more than 6,000. BioSpace reported that Lonza's antibody-drug conjugate work now centers on its site in Visp, Switzerland.

Lonza said it will pay in cash from cash on hand and existing credit facilities. According to BioSpace, Christian Seufert, head of Lonza's advanced synthesis business, told analysts not to assume a contract with Merck KGaA for the plants' output, because "the business was primarily focused on third-party sales and third-party revenue." That differs from Lonza's 2024 purchase of Roche's plant in Vacaville, California, which BioSpace said came with an agreement to supply the medicines Roche had produced there. Merck KGaA said its BioReliance contract testing services are not part of the deal, and that it will keep supplying CDMO customers, including Lonza, with consumables, technologies, and services. Kai Beckmann, chairman of the executive board and group chief executive of Merck KGaA, said a more concentrated Life Science portfolio "will allow us to focus our investments on building our scientific leadership."

Both companies expect the transaction to close in mid-2027. Merck KGaA said closing remains subject to customary regulatory approvals and other closing conditions. Lonza, in an ad hoc announcement under Swiss listing rules, said closing is subject to customary closing conditions. Until then the businesses will continue to operate independently, Lonza said, and Merck KGaA said the CDMO unit will remain part of its Life Science sector. The two companies said they will work to keep customer programs and supplies moving through the transition.