Repligen Buys Novozymes Unit, Expanding Product Base and Manufacturing Capacity
After the stock market closed last night, Waltham, MA-based Repligen (NASDAQ: RGEN) announced that it will buy a Swedish unit of Novozymes A/S, the Danish maker of industrial-biotech products, for 17 million euros, or about $22.7 million cash, plus 5 million euros ($5.6 million) in potential milestone payments. The unit, called Novozymes Biopharma Sweden, makes proteins that are used in the large-scale production of biotech drugs. The products are expected to generate about $16 million in sales this year and will double Repligen’s manufacturing capacity, the company said in a statement.
The acquisition is part of Repligen’s most recent stab at reinvention. The company, which was founded in 1981 as a maker of industrial enzymes, transitioned into drug development with mixed success, as Xconomy reported in September. Repligen is currently preparing to file for FDA approval of a hormone-based drug that’s designed to enhance MRI images of the pancreas, and it’s looking for a partners to help develop two drugs to treat rare disorders of the central nervous system.
Repligen sees the Novozymes business as a complimentary addition to its existing product line. Novozymes Biopharma makes a product called Protein A, which is used to manufacture some types of monoclonal antibody drugs. Repligen already supplies four different forms of Protein A. According to the company, there are 200 monoclonal antibodies in clinical development, most of which are manufactured with Protein A. As part of the Novozymes agreement, Repligen will acquire a 45,000 square foot manufacturing plant in Lund, Sweden.
Repligen also announced its earnings for the second quarter of fiscal 2012, ended September 30. Revenues jumped 18 percent to $8.6 million, largely because of demand for a Protein A product, the company said. All told, Repligen recorded total sales of $5.7 million for such “bioprocessing” products, which was a quarterly record, contributing to earnings of 2 cents a share. Repligen CEO Walter Herlihy told Xconomy in September he was aiming to turn Repligen profitable in fiscal 2012. The consensus among analysts prior to today’s news is that the company would break even for the year. No doubt investors will be watching this acquisition carefully to see how it impacts the bottom line in the coming months.
Repligen’s stock rose 3 percent in pre-market trading to $3.35.