Zurich (awp) – The pharmaceutical and diagnostics giant Roche has found in Lonza a buyer for the Californian site of its subsidiary Genentech in Vacaville. The pharmaceutical subcontractor will pay 1.2 billion dollars (1.1 billion Swiss francs) in cash to do this, to which should be added half a billion for the extension of infrastructure.
The buyer undertakes to offer new employment contracts to some 750 Genentech employees on site. The transaction must be finalized before the end of June and Vacaville will be integrated into the mammalian production hub, alongside Visp, Slough, Singapore, Portsmouth and Porriño, the Rhine multinationals indicated in separate press releases on Wednesday.
Lonza will initially continue to produce Roche’s biologic treatments at the site, before gradually scaling down and transforming to accommodate other customers.
The operation should boost Lonza’s growth rate in the medium term, in a range of 12 to 15% at constant exchange rates, compared with a target of 11 to 13% so far. On the other hand, it remains without effect on the ambitions in terms of profitability.
“Our production capacities are already running at full capacity, which is why we need these facilities,” Lonza CEO Albert Baehny said during a conference call. While pharmaceutical giants are increasingly subcontracting their production to specialists like Lonza, Roche has secured 30% of the production capacity on the Vacaville site in 2025. This percentage must subsequently decrease.
Lonza, for its part, will seek new contracts to ensure the use of Californian factories.
Long-standing auction
Roche formalized last May its intention to dispose of the historic Genentech factory in Vacaville, citing an alignment of its production facilities with the evolution of its incubator of products under development. The diversification of the latter, now extending from monoclonal or bispecific antibodies to cellular treatments through oncological vaccines, requires tools adapted to personalized medicine rather than mass production capacities.
Roche then promised to treat the site’s employees with “attention and compassion” throughout the sales process.
Analysts are focusing on the implications of the transaction for Lonza, much more than for Roche.
The amounts announced will not put too much strain on Lonza’s cash flow, which will on the other hand benefit from a clear strengthening of its position in the attractive and highly profitable market for biological preparations, considers Vontobel in a comment. The Zurich Cantonal Bank (ZKB) welcomes a rise in power on the essential American market.
The registered Lonza stood alone at the top of the Swiss Stock Exchange, ending the session up sharply by 5.7% to 509.60 Swiss francs. The Roche dividend certificate closed up 0.8% at 230.95 Swiss francs, while the flagship SMI index gained 0.35%.
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