Doubling down on need for mRNA vaccines and mAbs, Avantor puts nearly $3B in pumps and tubing company

07 Sep 2021
endpts.com
VaccineCollaborateGene TherapyAntibodyAcquisition
Acquisition-happy manufacturer Avantor has positioned itself at the front of the battle against Covid-19, and Tuesday it made another move to embed itself deeper into the ongoing pandemic response. Pennsylvania-based Avantor acquired Masterflex from Antylia Scientific for $2.7 billion in an all-cash transaction, the company announced. The acquisition is Avantor’s 43rd overall, as it has put more than $11 billion into projects since 2011, the company said, with this transaction aiming to be completed in the fourth quarter. Masterflex is headquartered in Vernon Hills, IL, and manufactures peristaltic pumps, single-use engineered tubing and components, which are used during aseptic fluid transfer. The buy allows Avatar to up its monoclonal antibody, cell and gene therapy, vaccine and mRNA production for a number of illnesses, including Covid-19. In beefing up its Covid operations, and capitalizing on the demand for vaccines, Avantor’s announcement comes on the heels of the US government’s plan to invest $3 billion in the vaccine supply chain. Booster shots have been recommended for high-risk individuals and some of the earliest recipients of the jab. “The business enhances our portfolio of proprietary technologies and strengthens our position in the highest growth segments of the market,” Avantor CEO Michael Stubblefield said in a press release. “Both Avantor and Masterflex share a strong culture of innovation and excellence, and we look forward to welcoming Masterflex’s highly skilled team to the Avantor family.” Masterflex’s pumps and tubing move materials through the manufacturing process, all the way through the fill-finish stage. The market for its technology is expected to grow by 15%, Avantor said in its call with investors Tuesday, and the company estimates an addressable market worth $5 billion by 2025. Stubblefield said that there were factors beyond economics that made his company the most attractive buyer, including its lack of regulatory concerns, ability to close quickly and strength of its single-use bioproduction. “We would now have the only end-to-end, fully integrated single-use management solution for the bioproduction space, so I know that the sellers were excited and anxious to sell us their platform,” he said. In April, Avantor acquired Ritter GmbH and its affiliates, expanding its clinical diagnostic testing. Ritter, a German company purchased for more than $1 billion, specializes in consumables that are used in PCR tests used for Covid-19 testing. That acquisition brought aboard a 40,000-square-meter manufacturing site with 6,000 square meters worth of clean rooms, leaving plenty of room for future growth. Though some companies have reported a decrease in Covid-19 testing that’s led to a stark loss of revenue, the Delta variant has raised the number of diagnostics tests needed both in the US and abroad, and that number may not shrink quite as quickly as was once expected. In Avantor’s Q2 call, Stubblefield said that roughly 40-50% of revenue came from diagnostics, and 40-50% came from vaccine production. “I think we’ve been quite consistent on our view about diagnostics, we certainly don’t have a lot of visibility into that market,” he said in the call. “We can really only see over the next one to two weeks, we’ve already baked in a very aggressive ramp down (of a need for diagnostics) into our projection.”
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