Charles River Laboratories signs $875 million cash deal to acquire cell and gene manufacturer Cognate BioServices.
Charles River has announced plans to acquire Cognate BioServices, a premier cell and gene therapy contract development and manufacturing organisation (CDMO), as well as Cobra Biologics, its gene therapy division. The transaction is expected to close by the end of the first quarter of 2021, subject to regulatory requirements and customary closing conditions.
Longevity.Technology: Charles River hope the planned acquisition will establish it as a leading scientific partner for cell and gene therapy development, testing and manufacturing, providing clients with an integrated solution from early research and discovery through CGMP production, the Current Good Manufacturing Practice regulations enforced by the FDA. The move will expand Charles River’s end-to-end manufacturing strategy, and give it a competitive advantage in cell and gene therapies, as well as boosting progress in regenerative medicine.
Cognate BioServices offers comprehensive manufacturing solutions for cell therapies, as well as for production of plasmid DNA for gene therapies from their Cobra Biologics locations. They also create other inputs in the CDMO value chain, including therapeutic proteins, microbiota and viral vectors. Cognate has experience producing various cell types and technologies used in cellular immunotherapy and immuno-oncology, regenerative medicine and advanced cell therapy.
Charles River will combine these with its integrated portfolio of manufacturing support services, including biologics testing, cell supply and safety testing. This acquisition should expand Charles River’s scientific capabilities into the emerging, high-growth cell and gene therapy CDMO sector, establishing a comprehensive solution from discovery and non-clinical development through CGMP manufacturing in advanced drug modalities.
James C Foster, Chairman, President and Chief Executive Officer of Charles River Laboratories, commented: “Cognate BioServices presents a unique opportunity to expand into a high-growth, value-added sector of the CDMO market and enhance our ability to meet our clients’ needs in emerging areas of scientific innovation.
This acquisition will be an exceptional strategic fit, adding to our comprehensive suite of early-stage research and manufacturing support solutions and enabling us to achieve our goal of establishing a single scientific partner to provide biopharmaceutical clients with an integrated solution to help accelerate their cell and gene therapy programs from discovery and non-clinical development through commercialization.
“Because of the synergistic fit with Charles River, the market growth potential, and the emerging role of advanced drug modalities as treatments for oncology and rare disease, we believe Cognate will meaningfully enhance our long-term revenue and earnings growth potential.”
“Because of the synergistic fit with Charles River, the market growth potential, and the emerging role of advanced drug modalities as treatments for oncology and rare disease, we believe Cognate will meaningfully enhance our long-term revenue and earnings growth potential. We look forward to welcoming Cognate’s dedicated employees to the Charles River family.”
Charles River’s aim with this acquisition is to provide clients with an integrated solution from basic research through to CGMP production. Partnering Charles River’s Biologics Testing Solutions business with Cognate should allow for clients to conduct analytical testing, process development and manufacturing for advanced modalities with the same scientific partner, enabling them to achieve greater efficiency.
Clients will also have access to the Charles River’s cellular products as the starting point for their cell therapy programmes, starting with an early-stage development process and then moving into CGMP production with Cognate, accelerating clients’ speed to market for advanced drug modalities.
The market for cell therapy and plasmid production CDMO services is currently estimated at approximately $1.5 billion and expected to grow by at least 25% annually over the next five years. The acquisition of Cognate is expected to add approximately $110 million to Charles River’s 2021 consolidated revenue for the partial year .