Biopharma’s ongoing quest to develop COVID-19 drugs and vaccines, plus growing industry demand for producing various types of new therapies, are fueling the $1.5-billion expansion of manufacturing capacity planned over the next two years by Cytiva and Pall, the executive overseeing both for parent Danaher tells GEN Edge.
Emmanuel Ligner, group executive, Danaher Biotechnology Group—who is also president and CEO of Cytiva—said the expansion will enable that company and Pall to meet demand for manufacturing across modalities that monoclonal antibodies, recombinant protein, and cell and gene therapy; as well as production basics used in the making of cells such as chromatography resins, cell culture media, and single-use technologies.
Cytiva and Pall plan to hire 2,000 full-time employees over the next two years.
COVID-19 drug and vaccine production has been among key drivers of growth for Danaher’s Life Sciences segment. The segment, which generated more than $10.5 billion in sales last year, includes Cytiva, Pall and six other companies: Beckman Coulter Life Sciences, Integrated DNA Technologies (IDT), Leica Microsystems, Molecular Devices, Phenomenex, and SCIEX.
Danaher acquired Pall for $13.8 billion in 2015, anchoring its life sciences segment with a global leader in high-tech filtration, separation, and purification. A year later, Danaher expanded its molecular diagnostics business by shelling out $4 billion for Cepheid, and in 2019 spent $21.4 billion for the former BioPharma business of GE Healthcare Life Sciences, which it re-launched in April 2020 as Cytiva.
“Cytiva and Pall both have responded very, very well to the pandemic. We’ve been able to grow, we’ll be able to accelerate the growth, accelerate M&A, and accelerate the capacity of deployment,” Ligner said. “Our objective is to serve the industry better in order to achieve our mission, which is to advance and accelerate therapeutics.”
At the peak of COVID-19 activity last September, Ligner said, Cytiva and Pall were working on more than 400 products related to developing drugs and vaccines against the virus.
“There’s still tremendous activity on the COVID front,” Ligner added. “There’s development of new products against new variants and so on, so there’s constant movement in the industry. We’re just trying to make sure we help the industry to fight this global pandemic.”
$2B projected in COVID-19 activity
Danaher President and CEO Rainer M. Blair told analysts on July 22 that the company expects to recognize $2 billion in COVID-related vaccine and drug revenue in 2021, and anticipated entering 2022 with approximately $1.5 billion in COVID-related work needing to be completed, or “backlog,” up from the $1 billion it estimated after the first quarter.
The backlog does not include the prospects of booster shots, or expanded vaccine authorization to children ages 12 and under, as both are uncertain.
“COVID-related demand is proving more durable than expected,” Jefferies analyst Brandon Couillard and two colleagues concluded in evaluating Danaher’s second quarter results July 22, citing in part Danaher raising its outlook on demand for Cepheid point of care COVID-19 PCR tests.
“Overall, we saw no new cause for concern here, and continue to like DHR as a core [long-term] holding,” Couillard and colleagues added, projecting a 6-9% increase in earnings per share over the coming year, and raising their price target for the stock to $325.
500 jobs for Wales, Utah
More than 10% of the new jobs planned by Cytiva and Pall—250 positions—will be created primarily in manufacturing, warehouse operator, material handler, and R&D scientist positions as Cytiva expands its bioprocessing equipment manufacturing campus in Cardiff, South Wales, with construction of an additional factory.
The new 11,000-square-meter (118,403-square-feet) facility will manufacture single-use bioprocessing equipment including jumper tubing assemblies, cell bags, and ÄKTA flow kits. The first products are expected to be manufactured at the new facility before the end of this year.
Another 250 jobs will be created as Cytiva expands its production of cell culture media at its facility in Logan, UT. By 2023, Cytiva plans to double the Logan site’s production capacity by converting 25,000 square meters (269,100 square feet) of land into new manufacturing lines, distribution hubs, and clean rooms. The expansion will add to a workforce at Logan that already exceeds 700 people.
The Logan site is the largest of three Cytiva locations focused on cell culture media production; the others are in Pasching, Austria and Singapore. Cytiva also plans to expand the capacity of the Pasching and Singapore sites, Ligner said.
The Logan site is about 80 miles north of Salt Lake City, to which Cytiva expanded in June when it acquired Intermountain Life Sciences for an undisclosed price. Intermountain is a manufacturer of high-purity water, buffers, and liquid cell culture media that runs a production facility in Salt Lake City, formerly based in the suburb of West Jordan, UT.
“This has already helped us to double capacity in buffer preparation and in buffers for the industry. And it’s close to Logan, so the team now has additional tools to make sure that we serve the industry,” Ligner said.
“We have a capacity in each site of about 8 million liters. Basically the acquisition of Intermountain doubled our capacity overall, but it has also given us different tools and greater agility, which is very important,” Ligner said. “There are different types of customers to serve in the industry, with different types of buffers, different volume requirements, and this gave us more flexibility very quickly.”
Cytiva also plans to create new jobs by building a new second chromatography resin plant somewhere in the U.S.; constructing a new single-use technology manufacturing site for Pall in Duncan, SC; and expanding all 13 existing Cytiva and Pall sites, including the Logan site and a manufacturing facility in Beijing that has reached capacity. The site had been overseen by a joint venture (JV) established by Pall and Beijing-based Austar Group, until Pall completed the acquisition of the Pall-Austar JV Lifesciences in order to add single-use technologies to meet regional vaccine manufacturing demand stoked by COVID-19.
The Austar expansion and Duncan, SC, construction are part of Pall’s previously-announced $114-million companywide expansion of global production capability across Pall’s seven sites.
“Single use is a very important segment. The industry has moved over the past 10 years from stainless steel to single use because it’s much more flexible, so we want to make sure that we support the growth that we’re seeing,” Ligner explained.
(Separately, Pall is also advancing single-use tech by furnishing its Allegro STR single-use bioreactors to Exothera’s two facilities in Jumet, Belgium to create a suspension-based platform of up to 2000L. The bioreactors will enable manufacture of gene therapies and viral vector-based vaccines, under a more than $7 million contract announced earlier this month.)
Growth in China, Europe
Also in China, Cytiva plans to expand its single-use technology manufacturing capacity through a partnership with Wego, one of four companies with which Cytiva signed expansion agreements covering manufacturing and bioprocess development last November at the Third China International Import Expo in Shanghai (the others being Zhifei, Clover, and Jinbo).
In March, Cytiva opened a second diagnostics design laboratory at its Tonglu manufacturing site near Shanghai, enabling Chinese developers to access Cytiva’s lab infrastructure, technical expertise, and consultation services without having to travel overseas to the company’s other design lab in Germany.
“China is our second largest market. China is a very important market for us, and we are continuing our growth and expansion there,” Ligner said. “We’re very pleased with our China team. They are doing a terrific job.”
The Tonglu lab was part of a $500-million manufacturing capacity expansion over five years announced in September 2020 by Cytiva alone, hiring 500 staff worldwide in the process. Overall, more than 1,500 staff having joined Cytiva since April 2020.
As part of this expansion, Cytiva began manufacturing single-use kits for its Sepax and Sefia cell processing systems at a 7,360-square-meter (79,000-square-foot) facility in Grens, Switzerland. Cytiva also opened a new leased site in Shrewsbury, MA, to carry out manufacturing of bioreactors. Cytiva moved that operation from a site about 7 miles southeast in Westborough, MA, where the company instead expanded its cleanroom by 10,000 square feet for making single use technology bags and flow kits.
As for the new investment, more than one third of the companies’ planned spending–$600 million-plus—will go toward expanding production of chromatography resins for analyzing or purifying biomolecules.
That expansion, Ligner said, would be achieved by building the second chromatography resin facility. Cytiva now produces those resins in Uppsala, Sweden, but has begun searching for a production site within the U.S. that would replicate and complement the Uppsala plant. Cytiva plans to hire 400 people in the U.S. and Sweden over the next two years to carry out its chromatography expansion plans.
“Right now, we’re manufacturing those products in Sweden, so a second facility would enhance the sustainability aspect of production,” Ligner said. “Proximity to customers is very important and the largest base of our customers is in the United States of America. We just want to make sure that we are close to them.”
Five acquisitions, 6th in Progress
Austar and Intermountain were two of five companies acquired this year by Pall and Cytiva, all for undisclosed amounts.
One of the other three is GoSilico, a German developer of mechanistic modelling software acquired by Pall in June to bolster its digital capabilities in bioprocessing. GoSilico’s software is designed to create “digital twin” simulations of downstream bioprocessing steps for more efficient chromatography and drug manufacturing process development.
“With those tools, you predict what might happen. You can help the decision making for the selection of a chromatography resin, so rather than having trial and error in the labs multiple times, which is time-consuming, you can accelerate production by using the computer to simulate in advance your processes,” Ligner said. “We’re very keen to bring digital tools to customers always having in mind our mission of advancing and accelerating therapeutics.”
The other two acquisitions:
- Precision NanoSystems, a Canadian manufacturer and developer of lipid nanoparticles acquired by Pall in a deal announced in June. The lipid nanoparticles are applied toward the delivery of genetic medicines, including mRNA vaccines and therapeutics.
- Vanrx Pharmasystems, a Canadian maker of robotic aseptic filling machines acquired by Cytiva in February. Vanrx specializes in drug product aseptic filling solutions designed to automate the preparation of small batches of biologic medicines, toward the manufacture of cell and gene therapies.
Danaher has another acquisition in the works, as it plans to purchase privately-held Aldevron for approximately $9.6 billion. Based in Fargo, ND, Aldevron manufactures high-quality plasmid DNA, mRNA, and proteins, serving biotechnology and pharmaceutical customers across research, clinical, and commercial applications including CRISPR, and currently employs about 600 staff.
“We are constantly looking, we constantly do strategic planning, ‘What do we foresee for the future?’” Ligner said. “And when those opportunities come, and where we think that it is a good strategic fit, we try we try to act on it.”
Advancing cell, gene therapy
Also on the cell and gene therapy manufacturing front, Cytiva on July 29 joined partners Harvard University, MIT, FUJIFILM Diosynth Biotechnologies, and Alexandria Real Estate Equities to break ground on a 40,000-square-foot biomanufacturing facility in Watertown, MA.
The partnership—formed in 2019 as the Center for Advanced Biological Innovation and Manufacturing, and recently renamed Landmark Bio—will also collaborate with five Harvard-affiliated hospitals—Brigham and Women’s, Massachusetts General Hospital, the Dana-Farber Cancer Institute, Boston Children’s, and Beth Israel Deaconess Medical Center—and the Massachusetts Life Sciences Center. Landmark Bio’s CEO is Ran Zheng, who previously held technical and manufacturing positions with Orchard Therapeutics, Amgen, Fujifilm Diosynth, and Sanofi Genzyme.
Earlier this year, Cytiva began partnering with San Francisco-based Multiply Labs to develop a robotic manufacturing system that will automate the manual portions of the cell therapy manufacturing workflow.
“One of the biggest pain points in the cell therapy is, it’s extremely labor intensive,” Ligner observed. “In the new modalities where there’s a need of new technology, there’s a need of new processes. There’s a need of new product, basically, and so we’re happy to collaborate in the automation.”
Headquartered in Washington, Danaher has approximately 69,000 staffers or “associates.” Since the mid-1980s, Danaher has carried out an ongoing company-wide Kaizen or continuous improvement effort based on lean manufacturing and anchored on a common culture and operating system, called the Danaher Business System, focused on people, plans, processes, and performance.
“We have great processes that help us to do a few things,” Ligner said. “Of course, there’s very good strategic planning, but also there is execution on the strategic plan, and also making sure that we leverage our current facilities and our current talent in order to both grow the talent but also to grow more capacity.”