One month shy of its 10th birthday, OXGENE™ has reason to celebrate early: WuXi AppTec has acquired the British contract R&D services provider for $135 million. The deal gives the Shanghai-based biopharma its first European facility and broadens its portfolio of technologies for designing and developing scalable cell and gene therapies.
OXGENE—founded in 2011 as Oxford Genetics Ltd. and re-branded in 2019—will continue operations under its own name as a wholly-owned subsidiary of WuXi AppTec’s cell and gene therapy business unit. That unit, called WuXi Advanced Therapies (WuXi ATU), is a global contract testing, development and manufacturing organization (CTDMO) business with substantial U.S. operations within Philadelphia, and a focus on accelerating time to market for cell and gene therapy products by transforming their development, testing, manufacturing, and commercialization.
The deal came more than a year after the companies began working together when OXGENE licensed its plasmid platform to WuXi AppTec for use in China. OXGENE offers customers SnapFast Plasmids for research use and SnapFast Pro Plasmids for GMP use.
Satisfied with OXGENE’s plasmid work, WuXi indicated it was interested in helping fund its partner. “We initially started talking about investment. And then, as discussions progressed and we realized the synergies between the two companies, this just made more and more sense,” Ryan Cawood, PhD, OXGENE’s founder and CEO, told GEN Edge.
Investment discussions began about seven to eight months ago, with talks toward acquisition culminating in an agreement over the past four months, he said.
“We were looking to raise capital to build out manufacturing capabilities, and obviously the costs of doing that are significant, so it was not something that we were considering embarking on lightly,” Cawood said. “We were looking at a wide investor base to achieve that. “Ultimately, we just decided that it would make much more sense to be acquired by a company that already had that, so that we could deploy our technologies through their manufacturing footprint.”
Filling a Gap
“In terms of the services we offer and the technologies that we’ve developed, WuXi fills a gap with what it provides and in terms of what we have been looking to try and achieve as a business,” Cawood said. “We’ve been looking to try and establish a global manufacturing footprint, which this acquisition gives us. It is a really nice dovetailing of our capabilities together.”
WuXi AppTec’s open-access platform enables more than 4,100 collaborators from over 30 countries. The company offers R&D and manufacturing for small-molecule drugs and testing for medical devices, in addition to services toward manufacturing of cell and gene therapies via WuXi ATU.
WuXi ATU has offered contract development and manufacturing organization (CDMO) services in cell and gene therapy for more than a decade, with customers in China, Europe and the U.S.—where the unit is growing within its Philadelphia campus within The Navy Yard.
Last November, WuXi ATU expanded its Philadelphia operations by completing its fourth facility there, a 140,000-square-foot lab that tripled its advanced testing capacity and enabled global advanced therapy developers to obtain timely characterization and lot release services. Philadelphia accounts for about 80% of WuXi ATU’s workforce, some 780 staff; another 150 are in China. Growth is expected to occur in both China and the U.S. WuXi ATU plans to grow in anticipation of surging demand for CDMO services for cell and gene therapy
By combining with OXGENE, WuXi ATU says it can offer gene and cell therapy development customers a turnkey solution for manufacturing from delivering genetic material to cells facilitated by OXGENE’s plasmid technology, as well as developing production and testing processes for customers in both clinical or commercial phases.
“This business combination represents a significant step in our ongoing effort to enable our customers and partners worldwide to deliver more effective and accessible advanced therapies to patients globally,” stated David Chang, PhD, CEO of WuXi ATU. “By combining WuXi ATU’s world-class cell and gene therapy CTDMO platform with OXGENE’s innovative capabilities, we will be able to provide transformative solutions for our customers
Chang and Cawood added that the combined company is also a geographic fit, he added, since OXGENE offers WuXi a long-sought presence in Europe.
Scalable AAV Manufacturing
In addition to SnapFast, OXGENE’s technologies include TESSA™, a scalable, plasmid-free adeno-associated virus (AAV) manufacturing system designed to facilitate robust and reproducible AAV manufacture at scale by lowering the high cost of goods and increasing packaging efficiency.
TESSA is designed to manipulate the adenoviral life cycle so that it can still provide high quality help for AAV replication without being able to manufacture itself, reducing adenoviral contamination by 99.9999% in a manufacturing run according to the company. Using two TESSA vectors improves yields of AAV2 by 40-fold, accompanied by a 2,000-fold increase in particle infectivity compared to a standard three-plasmid manufacturing approach.
OXGENE has also developed XLenti™ stable clonal packaging and producer cell lines offer easy scale up, reduced cost of goods and reduced process complexity. The company’s cloning and engineering services allow customers to customize and optimize plasmids for expression of a gene of interest, while its process development services optimize for preclinical lentiviral manufacture in its ISO:9001 accredited lab, manufacturing up to 10L scale before assisting technology transfer to customers’ own facilities or contract manufacturing organization.
From its inception, OXGENE has raised $26.6 million from investors, including Mercia Asset Management, Invesco and Canaccord Genuity Wealth Management. The three firms owned more than 80% of the company before the acquisition.
Mercia, a regionally focused specialist asset manager with £872 million ($1.2 billion) in assets under management, will receive its largest cash exit to date—£30.7 million (about $42.9 million)—for selling its 32.1% direct holding in OXGENE. Mercia first invested in the company in July 2013 through its third-party managed enterprise investment scheme (EIS) funds, and began direct investment in December 2015, raising its stake to £6.1 million ($8.5 million).
“It was the right time to either make a significant change to the shareholder base or look to be acquired as a business,” Cawood said. “Market dynamics and the various needs within the cell and gene therapy industry meant that this was more likely to happen, right now, but I think for us as a business, it was also just the right time to do it.”
Culling the Field
Within cell and gene therapy, as with other biopharma specialties, growth in recent years has fueled ongoing consolidation of smaller service providers into larger ones.
- Charles River Laboratories last month agreed to acquire Cognate BioServices, a cell and gene therapy contract development and manufacturing organization (CDMO), for approximately $875 million cash. At the time, Charles River said the addressable market for Cognate’s CDMO services, primarily cell therapy and plasmid production, is approximately $1.5 billion and was expected to grow at least 25% annually over the next five years.
- HemaCare: In a deal completed January 3, Charles River agreed to expand its presence in cell therapy by acquiring HemaCare for $380 million.
- Catalent last year bought MaSTher-Cell, a Gosselies, Belgium-based CDMO also focused on cell and gene therapy, from Orgenesis, which received proceeds of approximately $127 million from the $315 million transaction. Catalent expanded into gene therapy in 2019, when it shelled out $1.2 billion to acquire Paragon Bioservices (since renamed Catalent Cell & Gene Therapy).
- Among broader contract research organizations (CROs) serving biopharma, ICON last week agreed to acquire PRA Health Sciences for approximately $12 billion in cash and stock. ICON’s workforce—approximately 16,000 employees as of December 31, 2020—includes more than 400 cell and gene therapy professionals focused on optimizing clinical trials from site selection to study startup through execution, with expertise that includes project management, clinical services, product-specific logistics solutions, data flow, regulatory strategy, and central laboratory services.
