Lonza buys 5 sites from Germany's Merck to more than double US footprint

By Bhanvi Satija and Marleen Kaesebier

Nov 3 (Reuters) - Contract drug manufacturer Lonza said on Tuesday it would buy five US manufacturing sites from Merck KGaA, more than doubling its footprint in the country and expanding its capabilities to produce advanced cancer and gene therapies.

The acquisition will increase Lonza's US site count to nine, while allowing Germany's Merck to sharpen its focus on drug development.

Lonza said on a call with investors and journalists that the purchase price was around the midpoint of a range of 100 million to 600 million Swiss francs ($122 million to 734 million).

The deal comes as US President Donald Trump pushes for more domestic drug production and pharmaceutical companies commit billions of dollars to expanding US manufacturing.

"It accelerates our US expansion plans, acquiring well-invested CDMO (contract development and manufacturing organisation) facilities with experienced teams that provide strong platforms for future investments as market demand evolves," Chief Executive Wolfgang Wienand said.

Lonza expects the sites, located in Missouri, Wisconsin, Indiana and California, to generate about 250 million francs in annual sales in 2028.

EXPANDING IN THE US

Lonza has been building its US contract manufacturing network through acquisitions, including Roche's biologics plant in Vacaville, California, in 2024 and a spray-drying facility in Bend, Oregon.

Chief Financial Officer Philippe Deecke said the Merck deal adds clinical manufacturing capabilities that Lonza previously lacked in the US.

The two Wisconsin sites, which account for much of the acquired capacity, specialise in making key components used in targeted cancer therapies and include facilities designed to handle highly potent compounds.

Barclays described the deal as "strategically positive" for Lonza, citing potential gains from higher utilisation and improved margins.

JPMorgan analysts said the sale was a "minor positive" for Merck as it focuses on its life sciences business.

The deal is expected to close in the middle of next year and will add about 1,100 employees to Lonza. The company expects the sites to reach peak sales and profitability by the mid-2030s.

($1 = 0.8180 Swiss francs)

(Reporting by Danny Callaghan, Bhanvi Satija and Marleen Kaesebier. Editing by Anna Pruchnicka and Mark Potter)