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East meets West Coast
SAN DIEGO—Aimed at expanding its pipeline into the biomedical field while gaining entry into the lucrative contract development and manufacturing organization (CDMO) market, Tokyo-based Ajinomoto Co. Inc. has agreed to acquire Althea Technologies Inc., a leading provider of biopharmaceutical development and manufacturing services, for $175 million.
The transaction is expected to close this month, at which point Althea will become a fully consolidated subsidiary of Ajinomoto, said President and CEO Masatoshi Ito in a news release.
"Through this acquisition of Althea Technologies, with its talented management and dedicated employees, Ajinomoto aims to strengthen its business foundation and expand in the rapidly growing advanced biomedical field, in which Ajinomoto aspires, including this acquisition, to achieve revenue of JPY 30 billion by 2020," Ito stated. "The global market size for biopharmaceutical CDMO is estimated at $2.3 billion, and double-digit growth is expected."
The merger agreement stipulates that Ajinomoto will acquire all of the capital stock in Althea Technologies. Ito says Ajinomoto is committed to continuing to provide the highest quality services to Althea's customers.
"Ajinomoto is delighted and honored to have Althea, their talented management and employees join our group," Ito stated. "In combining Ajinomoto's experience in biotechnology together with Althea's sophisticated technology, experienced personnel and expertise in cGMP manufacturing, we aspire to expand our business for biopharmaceuticals manufacturing in the U.S. market and strengthen our advanced biomedical businesses."
Rick Hancock, Althea's president and CEO, called the transaction announcement "a great day for Althea, our employees, our customers and investors."
"During the past several months, I have had the opportunity to get to know members of the Ajinomoto team, and I am convinced that the combination of our two companies will yield outstanding synergistic benefits. Both companies are dedicated to the highest levels of quality and customer care," Hancock said.
Ajinomoto "is acquiring the entire company and all of Althea's business units, including Biologics Development, Fill/Finish, Analytical Development and Stability Testing," Hancock tells ddn.
"One of the great things about this deal is that all of the services that Althea offers fit perfectly with Ajinomoto's plans for expansion into biopharmaceutical production," he says.
Ajinomoto has developed a "highly effective alternative bacterial expression system called CORYNEX, and they are actively partnering this system with biotech and pharma companies," Hancock adds. "They needed a CMO to provide development and cGMP manufacturing capabilities to move these projects forward. I anticipate that as a result of the acquisition, we will see expansion in all of the Althea business units.
"Another thing we all love about this deal is that the entire team of employees will stay together, including all of senior management," Hancock continues. "Ajinomoto was looking for more than just a CMO with exceptional facilities, a great quality record and innovative technology." Ajinomoto "also wanted to partner with an experienced team that had demonstrated the ability to run a successful contract manufacturing business and deliver high-quality products to a wide variety of clients," he adds. "We also look forward to welcoming employees from the Ajinomoto family of companies who have unique experience and expertise that can help us grow and add new services. The name of the new company will be Ajinomoto Althea."
There are several ways the combination of Althea and Ajinomoto will be synergistic, Hancock says. Not only will Althea have access to the CORYNEX platform, which has advantages over the currently bacterial systems used to produce biopharmaceuticals, but it is a gram-positive, non-sporulating, Corynebacterium that expresses target proteins at high purity.
"So there is a reduced endotoxin burden, a much simpler purification and no need for refolding," Hancock says. "In addition, Corynebacterium has been used in the food industry for several decades, so the safety profile is well established. Plus, we will be able to work with Ajinomoto's clients and offer CORYNEX to our existing biologics customer base. Our North American Sales and Marketing group will now have access to markets in Japan and Asia, where Ajinomoto is a very highly respected company and a household name. As part of the Ajinomoto family of companies, we will also work closely with other business development teams in the U.S. and Europe."