Syngene International Makes Strategic Foray into US Biologics Manufacturing

Syngene International, a Biocon arm, has announced a significant strategic move with the acquisition of its first biologics manufacturing facility in the United States. The Bengaluru-based contract research, development, and manufacturing organisation (CRDMO) has purchased the facility from Emergent Manufacturing Operations Baltimore, a subsidiary of Emergent BioSolutions, for a deal value of $36.5 million. The acquisition, executed through Syngene’s wholly-owned subsidiary, Syngene USA Inc., signals a determined expansion of its global footprint in both human and animal health sectors.

The state-of-the-art facility is equipped with multiple monoclonal antibody (mAbs) manufacturing lines. This acquisition will substantially boost Syngene’s capacity, increasing its total single-use bioreactor capacity to 50,000 litres dedicated to large molecule discovery, development, and manufacturing services. The company emphasises that this strategic addition will ensure continuity of supply for its clientele, complementing its existing network of four development and manufacturing sites located in India and North America. Syngene will now offer comprehensive end-to-end services from this US facility, encompassing cell line development, process optimisation, and the supply of both clinical and commercial biologics.

This investment represents a strategic commitment to the US market, recognised as the fastest-growing biologics market. Syngene anticipates that this move will yield significant benefits for the local economy, including job creation and the stimulation of economic activity, thereby strengthening domestic biologics manufacturing capabilities and contributing to pharmaceutical innovation and supply chain resilience. The company also views this investment as fostering deeper economic collaboration between India and the United States.

Peter Bains, CEO Designate of Syngene International, highlighted the strategic rationale, stating that 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”. He added that the investment would enable Syngene to cater to growing client requirements in an expanding market and provide clients with access to the collective service capability of multiple geographic sites.

Alex Del Priore, Senior Vice President – Development & Manufacturing Services at Syngene, underscored the significance of the facility in response to growing client demand in the US and its role in strengthening the offering for animal health clients seeking USDA approval. Importantly, it enhances the options available to Syngene’s global customers by providing commercial-scale biologics manufacturing capabilities across its network.

The overall investment in the US facility is estimated at around $50 million, which includes the $36.5 million acquisition cost and the expenses required to make the facility operational. Deepak Jain, CFO of Syngene International, clarified that this investment will be fully funded through internal accruals and cash, with the company expecting to maintain a robust balance sheet and a low debt profile. While a minor dilution of operating margins is expected in the short term due to initial costs, Syngene anticipates asset turnover to grow to 1x in less than five years, with EBIT margins aligning with the company average from FY30. The acquisition is not expected to materially impact the current financial guidance for fiscal year 2024-2025.

The sale is anticipated to close in March 2025, subject to customary closing conditions, and the upgraded Baltimore facility is strategically located near key biotech hubs in the Northeast of the US, becoming available for client projects from the second half of 2025. Syngene expects demand from both US-based innovators requiring ‘onshore’ production and international innovators seeking a US-based manufacturing option, complementing its facilities in Bengaluru. Notably, the agreement includes a provision for Emergent itself to secure manufacturing capacity from the facility in the future, representing potential offtake from US innovators. The facility is also expected to support the growing animal health segment, where a US site is often a key client requirement.

Syngene International, with over 5600 scientists and 2.2 million sq. ft of specialised facilities, serves a broad spectrum of sectors including pharmaceuticals, biotechnology, nutrition, animal health, consumer goods, and specialty chemicals. The acquisition of this US-based biologics facility marks a significant step in its strategy to enhance its global service offerings and cater to the evolving needs of its diverse client base. On Monday, following the announcement, Syngene International shares on the BSE ended marginally lower.

Disclaimer: This is not a recommendation to buy or sell a stock. 

To read the RA disclaimer, please click here