Repligen Corporation (NASDAQ: RGEN) announced today that it has completed the acquisition of the business of Novozymes Biopharma Sweden AB, the Swedish unit of Novozymes Biopharma, a company focused on the manufacture and supply of growth factors used in mammalian cell culture and Protein A affinity ligands used in the production of monoclonal antibodies. This transformative acquisition, which was first announced on October 27, 2011 elevates Repligen to a world-leading supplier of products for manufacturing biologic drugs and provides the path to sustainable growth and profitability. The combined company is expected to generate total revenue of approximately $50 million in calendar year 2012.
“We are very pleased to have achieved our goal of creating a path to sustainable profitability for the Company through the acquisition of the business of Novozymes Biopharma Sweden AB,” stated Walter C. Herlihy, President and Chief Executive Officer of Repligen Corporation. “We look forward to quickly integrating our Swedish colleagues, leveraging the synergies within the combined organization and to continuing to supply premium products for the manufacture of biologic drugs.”
The Novozymes Biopharma Sweden AB acquisition diversifies and expands Repligen’s product offering and customer base while doubling the company’s manufacturing capacity. The business is located in Lund, Sweden and operates a 45,000 sq. ft., c-GMP capable production facility which was recently renovated with an investment of ~$25 million. The products acquired in this transaction are anticipated to generate $16-$17 million in revenue in 2011, and are sold primarily under long-term supply agreements with major life sciences companies including EMD Millipore, Sigma-Aldrich Corporation and GE Healthcare.
This was an all cash transaction in which Repligen made an upfront payment of 17 million euros or $22.7 million. The transaction includes future contingent milestone payments of 4 million euros (~$5.2 million) payable in 2012-2015 based on the complete transfer of specific manufacturing technology and the achievement of specified revenue targets in 2012-2014 for the products used in cell culture. The combined bioprocessing business is expected to generate $35-38 million in product revenue in calendar year 2012 and will have low selling, general and administrative expenses since the majority of the revenue derives from long-term supply agreements. In addition, we expect that the profit generated over the next several years will benefit from our $57 million in net operating loss Federal tax credits. At the end of our current fiscal year, ending December 31, 2011, we expect to have $35-$37 million in cash and no debt.