Biologics Boost M&A: Agilent Acquires BIOVECTRA for $925M

Agilent Technologies has announced plans to acquire BIOVECTRA, a Canadian contract development and manufacturing organization (CDMO) with a strong background in biologics and active pharmaceutical ingredients. The acquisition, which is to be finalized before 2025, involves a combination of cash and debt financing. Post-acquisition, BIOVECTRA will be integrated into Agilent's Diagnostics and Genomics Group. This merger aims to blend BIOVECTRA’s biological manufacturing capabilities with Agilent's CDMO services, which are focused on oligonucleotides and CRISPR-based therapeutics.

According to Padraig McDonnell, Agilent's president and CEO, BIOVECTRA's manufacturing strengths will help broaden Agilent's biopharma offerings. The goal is to create a more comprehensive portfolio that includes analytical instrumentation, consumables, and various lab services. Specifically, Agilent plans to leverage BIOVECTRA’s services in sterile fill-finish, plasmid DNA, messenger RNA (mRNA), and lipid nanoparticle formulation. Additionally, Agilent aims to manufacture high-growth technologies such as antibody-drug conjugates, highly potent active pharmaceutical ingredients, and drugs targeting glucagon-like peptide 1 (GLP-1). The combination of Agilent’s gene editing technology with BIOVECTRA’s biologics expertise is another anticipated benefit.

The consolidation of CDMOs is becoming increasingly prevalent as the market evolves with the introduction of complex therapies like CAR-T cell therapies, mRNA, and gene therapies. In 2023, the global CDMO market was valued at $146.3 billion and is projected to grow to $296 billion by 2033.

BIOVECTRA, established in 1970, was sold by Mallinckrodt to H.I.G Capital in 2019. The company generated $113 million in revenue last year and is experiencing double-digit growth this year. Agilent expects this acquisition to positively impact its earnings per share.

Agilent is renowned for supplying laboratory instruments, software, and consumables. To meet the increasing demand for therapeutic nucleic acids, the company invested $725 million last year to double its CDMO capacity.

The acquisition of CDMOs by larger companies has become a notable trend, driven by the need for additional capacity. For instance, Novo Nordisk acquired Catalent earlier this year to meet the soaring demand for its GLP-1 products, Ozempic and Wegovy, which target diabetes and obesity. Similarly, the French special purpose acquisition company eureKING acquired SCTbio and Skyepharma last year to establish a biologics CDMO.

Mergers and acquisitions in the CDMO sector are increasingly influenced by the demand for expertise in emerging therapies, particularly cell and gene therapies. This trend highlights the strategic importance of acquiring specialized capabilities to stay competitive in a rapidly evolving market.