Pharma Partner Sartorius Eyes Gene Therapy Market With $2.6B Deal (Pharma)

Biopharma contract manufacturers (CDMOs) are racing to ramp up their capabilities in response to a glaring shortage of viral vectors used to produce ground-breaking gene and cell therapies.

In the latest move to increase its partnership with gene and cell therapy developers, the Göttingen, Germany-based CDMO Sartorius is purchasing French lab biotechnology firm Polyplus in a €2.4 billion ($2.62 billion) deal expected to close in Q3 2023.

Under the blockbuster deal announced March 31, the Göttingen-based lab and biotech equipment supplier — through its French wing Stedim Biotech — inked an acquisition agreement for Polyplus with a consortium of private investors that include Warburg Pincus’s affiliate WP GG Holdings IV and private equity firm Archimed.

Polyplus is a privately-held company with a 270-strong staff spread across multiple locations in France, China, Belgium, and New York. 

The acquisition is pending consultation with employee groups and regulatory approvals.

Sartorius eyes the genetic material delivery market with the acquisition

If the deal sails through, the Polyplus buyout will give Sartorius the much-needed additional expertise in nucleic acid delivery, most notably plasmid DNA design and transfection reagents, both of which are crucial elements in producing viral vectors. 

More specifically, Polyplus specializes in developing and producing plasmid DNA and vital reagents used to ship RNA and DNA into cells, all of which form the core viral vector building blocks for life-saving gene and cell therapies.

According to the head of the bioprocess solutions division at Sartorius, René Fáber, the acquisition is a particularly strategic move that aligns with the German biotech tools maker’s current business model. 

The buyout, in particular, adds to Stedim Biotech’s range of cell culture media and related components, helping Sartorius meet the growing demand for viral vectors and cement its dominant position in the gene therapy market.

Bringing Polyplus’ expanding portfolio to the fold

Founded in 2001, the French lab tech firm Polyplus helps develop and produce biologics like plasmid DNA and genetic reagents for the biopharma industry. Makers of gene therapies leverage its flagship genetic reagents to introduce RNA and DNA into cells.

Both nucleic acid delivery systems and plasmid DNA put Polyplus at the center of ground-breaking gene and cell therapies, which are in high demand as more complex potential treatments are undergoing clinical trials.

Accordingly, the Illkirch-headquartered company has itself been making sweeping expansion moves through merger and acquisition deals prior to the Sartorius buyout. It bought reagent manufacturer and supplier Biowire in 2021, pushing its reach deep into the Asia-Pacific market.

It also acquired the Loos, Nord-based genetic engineering startup e-Zyvec for an undisclosed sum in late February 2022, helping incorporate plasmid DNA vector design into its core portfolio of transfection reagents. The biotech startup designs and produces plasmid DNA vectors for cell biology researchers, bio-manufacturers, and developers of gene therapies.

In December 2022, Polyplus built on the e-Zyvec buyout to expand its plasmid DNA vector design technology by merging with Xpress Biologics, a Belgian bio-pharma contract manufacturer.

Gene therapy clinical trials and bio-manufacturing bottlenecks

We’ve recently seen an array of gene and cell therapies developed by biotechs from all corners of the globe. As reported by Healthcare Weekly Magazine, this prompted the Food and Drug Administration (FDA) to release draft guidance to developers of human gene therapies, especially for Parkinson’s disease, Alzheimer’s disease, and other neurodegenerative diseases.

That said, massive milestones have been made in recent years in gene therapy technology, in particular, with multiple FDA approvals and clinical trials in the offing.

Last November, the $35-million-a-dose Hemgenix (Etranacogene dezaparvovec) became the first gene therapy to get approval from FDA for hemophilia B treatment. Developed by the Australian biotech firm CSL Limited, the first-of-a-kind hemophilia B gene therapy employs adeno-associated virus technology.

On its end, BioMarin is on the verge of launching in the U.S. Roctavian, its gene therapy for treating patients with hemophilia A. As noted by Forbes Magazine, a single dose of BioMarin’s Roctavian will cost around $2.5 million if approved by the FDA.

Moreover, CRISPR Therapeutics and Vertex seem on track to launch exa-cel, the first CRISPR technology-based gene-editing therapy for people with severe sickle cell disease and transfusion-dependent β-thalassemia (TDT). 

Despite these impressive breakthroughs, most commercial-stage gene and cell therapies are facing bio-manufacturing bottlenecks, largely due to dire viral vector shortages across the pharma industry.

The joint venture between Legend Biotech and drugmaker Johnson & Johnson has yet to churn out enough therapies to meet skyrocketing demand due to a supply shortage of lentiviral vectors. The same fate faces Bristol Myers Squibb’s CAR-T therapies for multiple myeloma.

The scarcity of viral vectors comes as the number of gene and cell therapy programs in clinical trials has ballooned. According to a survey carried out by the Alliance for Regenerative Medicine, there are currently 2,000 clinical trials of gene, cell, and tissue therapies, most of which are backed by academic and industry sponsors.

Expanding capabilities through acquisitions and mergers

The shortage of viral vectors has caused several bio-manufacturing expansion efforts, with Sartorius being the latest to acquire Polyplus. 

By bringing Polyplus to its fold, the German lab tools maker is following in the footsteps of other CDMOs like Catalent and Thermo Fisher Scientific, who have already executed acquisition deals of the same size to enhance their gene therapy technology stacks and component portfolios. 

Take Catalent, for instance. In addition to owning more than 15 large state-of-art fill-finish and production facilities for its gene therapies — including a 60,000-square-foot manufacturing plant in Belgium and a 350,000-square-foot complex in Baltimore, the company has made a series of top-dollar buyouts.

One of Catalent’s blockbuster deals was the $1.2 billion it paid in April 2019 to take over Paragon Bioservices, a gene and cell therapy biotech based in Baltimore, Maryland.

In October 2020, it bought a gene and cell therapy facility from Skeletal Cell Therapy Support SA, a Belgian unit of Bone Therapeutics. The deal for the 31,000-square-foot site in Gosselies, Belgium, cost Catalent around $14 million. 

This was soon followed by a spate of sizeable acquisitions, including a $44.5 buyout of Erytech Pharma’s gene therapy manufacturing facility within University Square Campus Park in Princeton, New Jersey.

Others, including Swiss biotech manufacturer and supplier Lonza, have chosen to build out their own production capabilities from the ground up.

Funding the deal

Sartorius announced in a Friday, March 31 statement that it would pay for the $2.62 billion Polyplus buyout through its Paris-listed subsidiary Stedim Biotech. 

The biggest chunk of the funding for the purchase will come from a stopgap loan from J.P. Morgan. Once the transitional period has elapsed, Sartorius is planning to use an equity line of credit and other long-term financing options to refinance the bridge loan.

Immediately upon the announcement of the deal, Sartorius shares fell 3.8% at the Frankfurt Stock Exchange, while the stock price of its French subsidiary Stedim Biotech dipped by 4.8% at the Paris Stock Exchange.

However, the acquisition is expected to significantly benefit the biopharma industry as it seeks to address the shortage of viral vectors for gene and cell therapy production.

Wrap-up

The acquisition of Polyplus by Sartorius marks a significant investment in the development and production of cell and gene therapies. 

With the ballooning number of cell and gene therapy programs in clinical development, the demand for viral vectors is skyrocketing, leading to a dire shortage that Sartorius looks to solve with the Polyplus buyout.