Bugs as drugs: Chr. Hansen and Lonza enter live biotherapeutic products joint venture

03 Apr 2019 --- Chr. Hansen’s establishment of a 50/50 joint venture together with Lonza in the live biotherapeutic products (LBPs) industry is the next phase in the evolution of how healthy bacteria are perceived. Announced yesterday, it will not change the nutrition & health focus at the Danish-headquartered company, however, with the JV not operating in the supplements or the probiotics/OTC domain. The focus will be on pharma-grade/GMP with defined strains.

“What we are doing is taking the core competencies that we have, which is all about working with bacteria. Then we are applying that in the adjacent pharma industry, as we see a big opportunity there,” Christian Barker, Chr. Hansen’s Executive Vice President of Health & Nutrition, tells NutritionInsight. “We have chosen to do that with a leading industry player, to make sure that we get access to capabilities to become  a leading player in the pharma and live biotherapeutic space.,”

Last night it emerged that Chr. Hansen and Lonza AG had signed an agreement to establish a 50/50 joint venture in the LBPs industry and position themselves as the leading contract development and manufacturing partner (CDMO) for biotech and pharma customers. The joint venture will be a 50/50 controlled legal entity that will operate from its headquarters in Basel (Switzerland) and have production facilities in Denmark and Switzerland. 

Click to EnlargeChristian Barker, Chr. Hansen’s Executive Vice President of Health & NutritionThe focus of the JV will be on how healthy bacteria can serve to cure diseases such as Irritable Bowel Syndrome (IBS), C. difficile infections and Crohn’s disease rather than the preventative focus that has typified probiotics. 

Barker adds that Chr. Hansen’s human health business today is focused on probiotics for dietary supplements and infant formula. “That will remain our focus for the business that stays within Chr. Hansen,” he stresses.

“There is a growing awareness among doctors, consumers and key opinion leaders about the power of the microbiome and the importance of probiotics,” says Barker. “The fact that there will be pharmaceutical products based on probiotics in the future will do a lot of good for the probiotics category, whether we call it that or not on the drug package. It adds credibility to the entire field,” he notes.

Chr. Hansen CEO Mauricio Graber says that the move marks a “quantum leap” for the company’s Human Microbiome lighthouse and that it will create a global pioneer and partner of choice for production of live biotherapeutic products.

For Barker, the entry into pharma is the next chapter in evolution of how healthy bacteria are used. “If you look at the history of bacteria, it started commercially with an ingredient for the dairy industry and there is still plenty of growth potential there,” he notes. “We now see opportunities in other segments in food and we have also seen it become important in dietary supplements and feed additives. Based on everything, we think now an additional chapter will be written about what bacteria can do in pharma. That is a space with exciting long term potential and this JV is all about participating in enabling the birth of that new industry,” he adds.

Dr. Hassan Benameur, Lonza’s Head of Oral Drug Delivery Innovation, says that the joint venture approach is about addressing an unmet need in the pharma segment. “It is about developing specific drug delivery of live biotherapeutic products in our enTRinsic capsules and for manufacturing strict anaerobic bacteria,” he explains to NutritionInsight. “The capsule is made of pharmaceutical excipients, so it is not being translated to the nutraceutical segment. Chr. Hansen has a focus on using anaerobic bacteria, which are used in the food, health and nutritional space. We also have capsules that are specific for answering the health & nutritional needs: DRcaps. But these are outside the scope of the JV,” notes Benameur.

Click to EnlargeFirst end-to-end CDMO for Live Biotherapeutic Products. Source: LonzaThe concept goes beyond Lonza’s strength through the Capsugel legacy portfolio. “It has a part from Capsugel and also a part from Lonza,  mainly the CGMP and regulatory aspects required for pharmaceuticals.”

News of the partnership comes as Chr. Hansen reports “solid” half-year results of 9 percent organic growth and maintains its overall outlook for the full year. Growth has been reported from all business areas: Food Cultures & Enzymes (10 percent), Health & Nutrition (11 percent) and Natural Colors (5 percent).

“We have 11 percent organic growth YTD in the health & nutrition business and the human health part of that business accounts for more than half of the revenue,” Barker stresses. “We have big ambitions for it as well in addition to the JV. Our commitment to that business is undiminished and we are investing in new concepts and products that we will launch in the years to come,” he adds.

Click to EnlargeThe potential of live biotherapeutics to treat disease. Source: LonzaThe Chr. Hansen and Lonza joint venture is positioned as bringing together best-in-class, complementary capabilities. It is claimed to be the first CDMO globally to provide a full supply chain that offers manufacturing of bacteria strains for therapeutic use. While Chr. Hansen contributes its extensive know-how in developing, upscaling and manufacturing bacteria strains, Lonza brings strong capabilities in pharma contract manufacturing and outstanding formulation and drug delivery technologies, including its enTRinsic capsules.

Furthermore, the joint venture will possess leading competences in handling, characterizing, formulating, manufacturing and encapsulating strict anaerobe bacteria. These competencies under one roof, with seamless exchanges between drug substance and drug product activities, will decrease development timelines and increase the chance of “right-first-time.” 

“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,” says Marc Funk, CEO of the Lonza Group. “By teaming up with Chr. Hansen, one of the world’s largest producers of bacteria, we are combining expertise that perfectly fits the very specific needs of aspirational companies in the microbiome space,” he notes. 

“Our customers will be able to draw on the unrivaled skill set of two world experts that master the exacting processes required for the production of strict anaerobic microbes through to formulation and dosage forms. We understand the complexities of bringing pharmaceuticals to market, including the evolving regulatory environment and will offer unique development and pharma-grade manufacturing that addresses an unmet need in the industry, enabling customers to deliver therapies for patients,” he adds.

Click to EnlargeThe future market for live biotherapeutics. Source: LonzaThe joint venture targets the emerging pre-clinical and clinical supply industry for LBP with a large upside to serve the ensuing commercial demand, once the first live biotherapeutic products are approved and available for treatment. Given the current number of ongoing pre-clinical to phase III drug trials, the clinical supply industry globally is estimated to reach €150-200 million by 2025. By 2035, the combined clinical and commercial supply industry is estimated to exceed €1 billion, according to Lonza and Chr. Hansen market intelligence (Citeline).

In a press briefing this morning, Lonza identified a healthy pipeline moving towards commercialization for live biotherapeutics, highlighting the therapeutic areas as a percentage of the total pipeline (see figures). “Irritable Bowel Syndrome, curing C. difficile infections and Crohn’s disease are the areas where it has been most clearly demonstrated. We start to see some effects on cancers and cardiovascular disease is also being investigated,” Benameur says.

The phased investment of approximately €90 million will be shared equally between the parties over a period of three years and 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 companies reported that €45 million will be spent initially and an additional €45 million once customer demand for clinical phase III and commercial supply is confirmed. The joint venture is expected to be largely self-funding after the production set-up has been established. The plan for the new JV is for it be operational once regulatory clearance is achieved, which could be by Q4 2019.

Barker notes that the JV will not be doing discovery or clinical developments of new drugs. Rather it will supply biotech and pharma companies who are looking to do clinical discoveries but don’t have the competence to upscale, encapsulate or quality control them. 

“Both we and Lonza have some ongoing projects and customer dialogues and we will look at what can be meaningfully transferred into the JV. But we haven’t been able to talk to customers until now as it has been a secret,” he explains. 

The partnership has been some time in the making. “We have been working on this for more than half a year to jointly assess the market opportunity, build a business case, agree how we would structure it and set it up. There has been a very thorough process behind it,” he notes. 

By Robin Wyers

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