$1B deal pushes GE further into biologics manufacturing

There is a global buildup in biologics manufacturing capacity as drugmakers and contract manufacturers prepare for the new drugs and biosimilars that will make up a larger slice of the pharma pie. GE Healthcare is tapping further into that growth with a $1 billion deal that gives it three businesses that Thermo Fisher Scientific ($TMO) has decided to unload, including its HyClone cell culture media and sera operation.

In addition to the HyClone business, GE ($GE) will pick up Thermo Fisher's gene modulation and magnetic beads businesses for approximately $1.06 billion, the companies announced Monday. GE said the deal, which is slated to close early this year, helps it expand an "end-to-end" play in cell biology research, cell therapy and biologics manufacturing. The trio of businesses generated about $250 million in revenues last year.

In an email, GE Healthcare spokesperson Val Jones said the three businesses have approximately 625 people, with facilities in the U.S., Singapore, Australia, New Zealand and Belgium. Asked about any job cuts that might occur, Jones responded that "the knowledge and expertise of the Thermo Fisher employees who would join GE Healthcare as part of the acquisition will be key in the continuing growth of the GE Healthcare Life Sciences business. GE Healthcare values the highly talented employees that will be joining them."

GE is already a player in the biopharma manufacturing category. Last month, for example, it completed installation of its biomanufacturing platform at JHL Biotech's Research Center and manufacturing plant in Hsinchu, Taiwan, and it is installing essentially the same FlexFactory equipment at JHL Biotech's KUBio plant being erected by GE Healthcare in Wuhan, China. The Thermo Fisher deal moves the company further into "biopharmaceutical manufacturing," as well as research and discovery, Kieran Murphy, CEO of GE Healthcare's Life Sciences, which will absorb the new operations, said in a statement.

Many drugmakers are adding biologics manufacturing plants as more high-priced, large-molecule medicines are developed. Roche ($RHHBY), which has a bunch of biologic drugs already approved and nearly 40 under development, will lay out more than $880 million to boost its production in three countries, including $285.9 million to expand biologic manufacturing capacity at facilities in the U.S. The buildup is expected to add 500 new jobs globally over the next 5 years. Novartis ($NVS), Lonza and Boehringer Ingelheim all have new biologics manufacturing plants under construction.

- here's the GE announcement
- and the Thermo Fisher release