Lonza and Chr. Hansen joint venture taps into microbiome boom

Companies engage in a three-year plan to provide a full supply chain offering for production of bacteria strains for therapeutic use

Swiss CDMO Lonza and Danish bioscience company Chr. Hansen have launched a 50/50 joint venture in a move to pioneer the live biotherapeutic products market, also known as LPBs. The business will operate from Lonza's headquarters in Basel with production facilities in Denmark and Switzerland.

Both companies believe the joint venture can become the first conglomerate globally to provide a full supply chain that offers to manufacture bacteria strains for therapeutic use.

The joint venture puts Lonza and Chr. Hansen ahead of the curve in the microbiome space. With the new business, both companies target the emerging preclinical and clinical supply industry for LBPs with the upside to serve an ensuing commercial demand once the first approved live biotherapeutic products become available for treatment.

This is a three-year commitment and a major bet. A Citeline market intelligence on the number of ongoing preclinical to phase III drug trials hinted that the clinical supply industry globally could reach €150-200 million by 2025. By 2035, the combined clinical and commercial supply industry is estimated to exceed €1 billion.

"We need to think differently about how we develop solutions for manufacturing in the microbiome space as we see the potential of this therapeutic area develop,” said Marc Funk, CEO, Lonza Group.

The Lonza chief pointed out that customers will be able to draw on the unrivalled skillset of two world experts that master the exacting processes required for the production of strict anaerobic microbes through to formulation and dosage forms.

Manufacturing infrastructure

Both Lonza and Chr. Hansen are optimistic about the joint venture. The companies have brought together unique expertise in the industry and complementary capabilities in the pharma and biotech sectors.

As part of the agreement, Chr. Hansen will contribute know-how in developing, upscaling and manufacturing bacteria strains. Lonza will use its capabilities in pharma contract manufacturing and formulation and drug delivery technologies, including the drug delivery capsules enTRinsic.

The joint venture will possess competences in handling, characterising, formulating, manufacturing and encapsulating strict anaerobe bacteria, all under "one roof".

Mauricio Graber, CEO of Chr. Hansen, commented: “The joint venture is a quantum leap for Chr. Hansen’s human microbiome lighthouse. It’s a great opportunity to utilize our microbial capabilities in the highly attractive LBP industry while sticking to our strategy of not becoming a fully-fledged pharma company."

Pharma-grade production infrastructure in the making

The joint venture includes a phased investment of approximately €90 million, which will be shared equally between the parties over a period of three years. The funding will be deployed to build cGMP-compliant pharma production capabilities.

The joint venture will upgrade existing facilities in Hørsholm (Denmark) and equip new facilities in Basel (Switzerland) to serve pre-clinical to phase II projects.

Further facilities for phase III and commercial manufacturing will be developed as the pipeline matures.

Investments follow a stage-gate-process with clearly defined targets. The venture pledged to spend €45m initially and an additional €45m once customer demand for clinical phase III and commercial supply is confirmed.

Both companies expect the joint venture to be largely self-funding after the production set-up has been established.

Companies