Syngene buys its first manufacturing facility in US for USD36.5 million

Bangalore: Syngene International Limited, a global contract research, development, and manufacturing organization (CRDMO), has acquired its first biologics site in the USA – fitted with multiple monoclonal antibody (mAbs) manufacturing lines for $36.5 million.

The state-of-the-art biologics facility, acquired by Syngene USA Inc., a wholly owned subsidiary of Syngene, from Emergent Manufacturing Operations Baltimore, LLC, a subsidiary of EmergentBioSolutions Inc., will expand Syngene’s growing global biologics footprint to better serve its customers across both human and animal health market segments.

The new site will increase Syngene’s total single-use bioreactor capacity to 50,000L for large molecule discovery, development, and manufacturing services. Additionally, it will provide Syngene’s customers with continuity of supply from its four development and manufacturing facilities located in India and North America, offering services ranging from cell line development, process optimization and both clinical and commercial supply.

The US facility is expected to create jobs, stimulate local economic activity, and strengthen domestic biologics manufacturing capabilities, while also contributing to pharmaceutical innovation and supply chain resilience.

Peter Bains, CEO Designate, Syngene International Ltd., said, “With one of the largest biologics R&D teams and commercial scale manufacturing capabilities in both India and the USA, we now offer a compelling and flexible solution for global pharma and biotech customers. This investment will enable Syngene to cater to growing client requirements in an expanding market. It will also provide clients, access to collective service capability of multiple geographic sites, scientists and experience.”

Alex Del Priore, Senior Vice President – Development & Manufacturing Services, Syngene International Ltd., said, “This facility is a significant milestone for Syngene and comes in response to growing client demand in the United States, the fastest-growing biologics market. It strengthens our offering for animal health clients looking for USDA approval for their products. Most importantly, it increases the options we can offer our global customers, providing commercial-scale biologics manufacturing capabilities across our global network and will be underpinned by existing key client projects.”

“The investment will be synergistic with expected additional process development work that will be executed in India while manufacturing can be done in the US. The investment will be fully funded through internal accruals and cash. The Company will continue to maintain a robust balance sheet, a low debt profile, and a comfortable safety margin for debt covenants post this investment. As we ramp up utilization, we expect asset turnover to grow to 1x in less than 5 years, with EBIT margins expected to be in line with the Company average from FY30 and positively contribute to bottom line. The acquisition will not materially impact the current financial guidance given for fiscal year 2024 - 2025. In the short term, we expect minor dilution of operating margins as a result of costs to be incurred in this facility,” added Deepak Jain, CFO, Syngene International Ltd.

Overall investment in the US facility is estimated around US$50 million, including the cost of acquisition (US$36.5 million) and expenses to make the facility operational. The sale is expected to close in March 2025, subject to the satisfaction of customary closing conditions. The upgraded Baltimore facility is strategically located near key biotech hubs in the Northeast of the US and will be available for client projects from second half of 2025. Syngene anticipates the site will see demand from innovative US mAb developers requiring direct access for ‘onshore’ production, as well as international innovators that want a US based manufacturing option and complements the capabilities and capacity available across its facilities in Bengaluru. As part of the agreement, Emergent itself has the right to secure manufacturing capacity from the facility in the future, representing offtake potential from US-based innovators. It will also support the growing animal health segment in which a US site is often a key client requirement.