Lonza, a leader in the contract manufacture of active pharmaceutical ingredients (APIs), has made a nonbinding bid to acquire Patheon, an Ontario-based contract manufacturer of drugs in their final-dosage form. The Swiss firm’s bid of $3.55 per restricted-voting share values Patheon at $460 million.
“Our interest in Patheon is consistent with Lonza’s stated strategy of expanding our offering across the pharmaceutical manufacturing value chain,” Lonza CEO Stefan Borgas says. “An acquisition of Patheon would take us into the complementary activities of finished-dosage development and manufacturing for both small-molecule and biological active ingredients.”
Lonza’s offer comes eight months into a contentious hostile takeover bid for Patheon by JLL Patheon Holdings, a group of investors that holds 39% of the Canadian firm. JLL is offering $2.00 per share.
Paul W. Currie, chairman of a special committee of independent Patheon directors, says that although the committee favors Patheon continuing as an independent company over the JLL offer, it “also believes that the Lonza proposal would provide an excellent opportunity to secure the successful future development of Patheon and that it is in the best interest of all Patheon shareholders to explore the Lonza proposal further.”
Patheon has agreed not to negotiate a transaction with any party other than Lonza until Sept. 30.
Industry analyst Peter Pollak, who formerly headed Lonza’s fine chemicals division, says the addition of final-dosage formulation would likely be most beneficial to Lonza’s biologics business. He notes that Lonza is already working with most of Patheon’s major pharmaceutical customers, making small-molecule APIs and intermediates for firms that contract elsewhere for final-dosage formulation.
“In biopharmaceuticals, the situation is different,” Pollak says. “If Lonza can offer a one-shot deal, this would attract new customers.”
A deal with Patheon would mark a second giant step under Borgas away from Lonza’s traditional business of bulk pharmaceutical manufacturing. In 2007, the company acquired Cambrex’ research bioproducts and microbial biopharmaceutical businesses.