Cambrex Will Sell Biotech Businesses To Lonza

Cambrex is selling its biopharma and bioproducts businesses to Lonza, the Swiss contract manufacturer of fine chemicals and biologics, for $460 million.

Separately, Cambrex is selling two European active pharmaceutical ingredient (API) facilities to International Chemical Investors Group (ICIG), a Luxembourg-based holding company, for an undisclosed sum. Cambrex acquired the sites, in Cork, Ireland, and Landen, Belgium, in 1999.

Together, the sales will leave Cambrex a much smaller company operating just part of its human health division, which conducts contract manufacturing of drug intermediates and APIs.

Cambrex' moves, part of a strategic review announced earlier this year, will concentrate the company's efforts at sites in Charles City, Iowa; Karlskoga, Sweden; and Milan, Italy. Chief Executive Officer James A. Mack notes that the three sites encompass differentiating technologies such as high-potency and high-energy manufacturing, controlled-substance production, and generic API manufacturing.

Cambrex' biopharma business includes biologics manufacturing facilities in Baltimore, Md., and Hopkinton, Mass. Lonza already operates biologics plants in Portsmouth, N.H., and England. Cambrex' bioproducts business manufactures and markets research, therapeutic, and analytical testing products based on cell biology for drug discovery and manufacturing.

The business units together accounted for 42% of Cambrex' 2005 sales of $452 million. Lonza CEO Stefan Borgas says the purchase will "accelerate the delivery of Lonza's strategic shift toward life sciences that we mapped out two years ago."

"Both Cambrex and Lonza justified their transactions as being in the best interest of their shareholders, albeit with a small nuance," says former Lonza executive and now independent industry analyst Peter Pollak. "Cambrex referred to their short-term, Lonza to their long-term interests."

For ICIG, the purchase of the Cork and Landen plants is the latest in a string of acquisitions of European chemical manufacturing assets. Since June 2005, the firm has acquired the Albemarle PPC unit; six separate businesses from RAG Group's Rutgers division; and Enka, a former subsidiary of Acordis. The sites purchased from Cambrex will become part of Corden PharmaChem, a new business launched by ICIG focusing on chemical production for the pharmaceutical industry.