Catalent to Acquire Paragon Bioservices for $1.2 Billion to Enhance Integrated Biopharmaceutical Solutions

VCBeat (WeChat Official Account: vcbeat) learned from foreign media that on April 15, U.S. local time, Catalent, a global biopharmaceutical company based in Somerset, New Jersey, announced the acquisition of Paragon Bioservices, a viral vector research and development company. Under the agreement, Catalent will pay $1.2 billion to fully purchase the outstanding shares of Paragon Bioservices, with $650 million provided through a senior secured credit facility. Catalent has issued $650 million in preferred stock to the Leonard Green & Partners (LGP) fund.

It is reported that the transaction is expected to be completed by June 2019. Following the closing, all operations of Paragon Bioservices will continue to be led by its CEO, Pete Buzy, and the original management team, comprising approximately 380 employees of Paragon Bioservices, will directly join the Catalent team. Currently, Peter Zippelius, a partner at LGP Funds, has joined the Board of Directors of Catalent.

Paragon Bioservices, established in 1990, is a contract development and manufacturing organization (CDMO) headquartered in Baltimore, Maryland. The company primarily produces viral vectors for gene therapy and pharmaceutical clients, provides production and purification services for monoclonal antibodies, recombinant proteins, viral vectors, and vaccines, and supplies medical devices containing viral vectors required for gene therapy to clinicians.

For 29 years, Paragon Bioservices has remained committed to partnering with leading biotechnology companies to tap into the $40 billion gene therapy market. Leveraging its specialized expertise, Paragon Bioservices develops and manufactures a portfolio of products based on translational technologies for its clients, including complex biologics such as adeno-associated virus (AAV) vectors, next-generation vaccines, oncolytic viruses, and lentiviral vectors.

According to Catalent’s disclosed report, Paragon Bioservices is projected to generate over $200 million in revenue this year and maintain a 25% growth rate in the gene therapy market, solidifying its position as an industry leader.

Pete Buzy stated in a press release, “NewSpring Health Capital and Camden Partners, existing investors in Paragon Bioservices, are delighted that we have reached this milestone. The partnership between Paragon Bioservices and Catalent, a leading drug developer in the industry, will enable us to achieve our next-stage development goals, expand our service platform, and deliver greater benefits to our customers and their patients.”

“Paragon Bioservices complements our business with its specialized expertise in the rapidly growing gene therapy manufacturing market, accelerating Catalent’s long-term growth,” said John Chiminski, CEO of Catalent. “Paragon brings a complementary capability to Catalent that will fundamentally enhance our biologics business and the end-to-end integrated biopharmaceutical solutions we provide to our customers.”

Catalent (NYSE: CTLT), founded in 2007, is a specialized generic drug manufacturing company. The company possesses the approved proprietary GPEx technology, providing advanced technologies and integrated solutions for the production of biologics and biosimilars, and has recently launched its 20th commercial product. Catalent views mergers, acquisitions, and investments as potential components of its business growth strategy to expand its capabilities in research, development, manufacturing, and marketing.

Catalent employs more than 11,000 people, including over 1,800 scientists, across more than 30 facilities on five continents. The company generated approximately $2.5 billion in annual revenue in 2018, with the vast majority of sales coming from the United States, followed by Europe.

(Compiled by Wang Chan)