Lonza sells lipid oral dosage facilities to NextPharma in softgel market exit

19 Jan 2021 --- Lonza will exit the softgel arena in the pharma market, as well as in the consumer health and nutrition market, following the imminent sale of two of its production sites to NextPharma. The company’s French site in Ploermel and British site in Edinburgh both specialize in lipid oral dosage forms.

Peter Burema, CEO of NextPharma, tells NutritionInsight that the companies expect to receive all necessary approvals in Q1 2021. The financial details have not been disclosed.

A Lonza spokesperson also says the company was not actively looking in the market to divest these assets. 

“We were approached by NextPharma and felt that the capabilities at the Ploermel and Edinburgh sites could be better leveraged and developed outside of Lonza,” they detail.Licaps will still be offered through Lonza’s other sites in France, the US and Japan.

Capsules remain core
As a result, Lonza will also no longer make liquid-filled hard capsules for the pharma market, aside from retaining capability for feasibility studies as part of a technology selection offering. However, it emphasizes that liquid-filled hard capsules like Licaps remain core to its nutrition business. 

Notably, Licaps will remain on offer through other sites in France, the US and Japan. The company recently announced an investment of CHF 85 million (US$93.7 million) to expand capsule manufacturing capacity by 30 billion capsules annually across eight sites.

The spokesperson states that Lonza also plans to focus on liquid-filled capsules within the nutrition space to grow its position in this area further.

Last month, Lonza shared that it had experienced a surge in demand for its ingredients and hard capsules for sports nutrition applications since the spring.

The “ideal” buyer
NextPharma offers contract development and manufacturing services in oral and topical – including sterile ophthalmic – finished dosage forms.

“As such, [NextPharma] is the ideal buyer given the technologies available at the Ploermel and Edinburgh sites,” says Gordon Bates, president and head of small molecules, Lonza.

“We are confident that the capabilities and experience at the two sites are a complementary fit with NextPharma’s portfolio and that it is ideally placed to develop both to their full potential,” he adds.

With this intended acquisition, NextPharma plans to develop and broaden its technology offering into lipid-based finished dosage forms. This is in addition to offering high-potency capabilities and new chemical entity (NCE) development services to its customers.NextPharma is taking over production sites for softgels, including those for high potency and hormonal products.

Harnessing synergies
Burema expects this deal will generate commercial (including cross-selling) synergies with its existing business.

“The acquisition is fully aligned to our strategy of growing both our existing business and expanding our offerings into new technology and product types through mergers and acquisitions (M&A),” he states.

NextPharma will continue to evaluate further M&A opportunities consistent with its two-pronged strategy: 

• Extending existing technology and product type offerings.
• Expanding operational footprint within Europe and into North America.

Emphasizing consumer experience
Lonza emphasizes that should the agreement receive all necessary approvals, a “seamless customer experience” will remain a focus through the carve-out and ownership transfer process. 

Maintaining high standards of service delivery and quality for customers will remain a priority for NextPharma through the transition period.

“Both our companies have a focus on people development and customers, and we will be working closely in the coming months to ensure a smooth transition for all if the project is concluded,” says Bates of Lonza. 

In October, Lonza revealed a new structure and culture for its businesses, with a dedicated focus on the pharma, biotech and nutrition industries. At the time, capsules and health ingredients represented 27 percent of sales. 

By Katherine Durrell