Paragon BioServices gets $1.2B Acquisition Deal by Catalent after launch of New Gene Therapy Manufacturing Facility
April 15, 2019
Paragon BioServices, the home-grown Maryland biotech company that started in a Baltimore incubator 30 years ago, has grown to more than 400 employees and is two weeks away from beginning production in a brand new 150,000 square foot state-of-the-art, world-class GMP manufacturing facility for gene therapies.
However, before a single new production run will take place, Catalent, a world-leading Contract Development and Manufacturing Organization (CDMO) with $2.4B annual sales, is set to make Paragon its latest acquisition to expand its gene-therapy manufacturing capabilities with a $1.2B all-cash deal.
Paragon BioServices is a CDMO that has caught the attention of the life science industry with their unparalleled expertise in gene therapy manufacturing for clinical and commercial thereapeutics. Gene therapy manufacturing is a highly complex process and therefore many companies are expected to outsource production to specialists like Paragon. With more than 25 new FDA approvals expected in the next three years, the gene therapy industry is expected to see double-digit growth. Paragon has projects underway with 20 of the worlds top 30 industry leaders, which made them an ideal acquisition target for Catalent.
Last week’s grand opening celebration of the new Anne Arundel facility near BWI was a proud moment for many who have been part of Paragon’s journey. President and CEO, Pete Buzy, acknowledged that no one stood to be more proud than Founder and Board Chairman, Marco Chacon, PhD. Chacon built the foundation for what Paragon is today and grew the company to over 100 employees before Buzy came onboard as part of the 2014 investment deal with Camden Partners and NewSpring Capital. In the just 4.5 years since, Buzy and team have transformed Paragon into a world-class operation, poised to lead the market and produce therapeutics that will potentially save thousands of lives around the world.
The company is now poised to add more than 100 more jobs and begin expansion designs for its third facility, also at the BWI complex, by the end of this year.
Governor Larry Hogan, who attended the Grand Opening as an honored guest, praised Paragon by stating, “There are only a handful of companies in the entire world that can do what Paragon Bioservices can do with this massive expansion… Maryland is proud to have a global reputation as a leading force in biohealth innovations, and today is further proof that we are just getting started. And you ain’t seen nothing yet.”
He was right. Even though soon those capabilities will belong to Catalent, through the acquisition, Maryland’s reputation in gene therapy will only continue to grow.
“The building that stands behind us represents the next chapter in gene therapy manufacturing and development,” stated Matt Khair of CRB, the design and engineering firm that led the novel integrated rapid delivery approach for Paragon. It was this approach that made it possible to deliver 75,000 sq feet of functional space in a record-worthy 15 months after kcik-off, helping to put the company in a position to confidently bring on new client programs and grow their pipeline.
Little did Khair know that it would be the last chapter in Paragon’s story and that they would become the latest BioHealth Capital Region company to fetch a blockbuster acquisition by a global life science industry leader. Other recent acquisitions include BeneVir’s $1B acquisition by Janssen, a JNJ Company, in 2018, and the 2017 Sucampo acquisition for $1.2B by Mallinckrodt.
“Paragon has set the standard for other CDMO’s around the world in its pursuit of biomanufacturing excellence,” stated Marty Rosendale, CEO of Maryland Tech Council at the Grand Opening celebration. After further sharing that the state of Maryland has also become known around the world for its strength in vaccines and gene & cell therapy manufacturing, Rosendale made a prediction, that many who are close to the industry would probably see as a safe bet.
“I predict we will be #1 in this field,” Rosendale said. “I believe this is the tipping point of what’s to come. The standard has been set. The bar has been raised by the company whose very name means the standard and center of excellence.”
The future with Catalent is unclear, but Paragon’s impact on the industry will be felt for years to come. Khair captured it best in his closing remarks, sharing, “I wish you all great success as you put this facility to work because I know that the success achieved here will impact the lives of many far from here for years to come.”
Stay tuned as we continue to cover the Catalent story and the new manufacturing facility.