Catalent snaps up Novavax production sites and 100 employees in $18M deal

Novavax is turning over its manufacturing operations to Catalent’s Paragon Gene Therapy CDMO operations, getting some cash for development in the deal. (Novavax)

Another deal has been struck in the rapidly evolving market for gene therapy manufacturing. Just two months after Catalent jumped big time into the gene therapy realm, it is adding a couple of small vaccine production sites and 100 employees to its operation.  

Catalent, which in April struck a $1.2 billion all-cash deal for gene therapy CDMO Paragon Bioservices, is now picking up the gene manufacturing operations of vaccine biotech Novavax. Catalent will pay $18 million up front for the production equipment and other assets and take over the leases on Novavax's sites in Gaithersburg and Rockville in Maryland, as well as about 100 employees. 

Novavax is negotiating a long-term arrangement with Paragon to provide process development and manufacturing services for specified Novavax programs. The transactions are expected to close in July 2019, the companies said.

“This alliance is a true win-win-win for Paragon, Novavax and our employees,” Novavax CEO Stanley C. Erck, said in a statement. “This mutually beneficial transaction allows Paragon to quickly support the growth of its gene therapy development and manufacturing business and simultaneously offers Novavax a strategic and cost-effective approach to addressing its manufacturing needs into the future.”

The transfer of employees will cut Novavax's headcount by about 50% a spokesperson said. 

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Initially, Catalent will provide clinical material for Novavax programs like its RSV vaccine for infants which is its only candidate in Phase 3, the company said. If approved, it would provide commercial-scale production, all of which the companies said will benefit from the Novavax employees that will transfer. 

“Novavax’ advanced GMP development and manufacturing capabilities and, even more importantly, its very strong team of experts, will help accelerate our gene therapy manufacturing strategy and rapid growth,” said Pete Buzy, president of Paragon’s gene therapy business said in a statement. 

The Gaithersburg site is about 53,000 square feet and the Rockville site is about 51,000 square feet. 

With its deal for Paragon, Catalent got a recently completed commercial-scale manufacturing facility near Baltimore and 380 employees. Catalent said Paragon’s expertise with adeno-associated virus vectors, plasmids and lentivirus vectors will position Catalent firmly to capture some of the $40 billion gene therapy market. 

RELATED: Thermo Fisher shoulders into gene therapy manufacturing with $1.7B deal for Brammer

That deal came just two weeks after CDMO and Catalent competitor Thermo Fisher Scientific announced it is buying Cambridge-based viral vector player Brammer Bio for $1.7 billion. That deal gave Thermo Fisher manufacturing locations in Massachusetts and Florida along with 600 employees. 

The deals are following the biotech trend for developing gene therapies that can provide cures for some very serious disease. Novartis, Gilead Sciences and Spark Therapeutics have all gotten gene therapies approved in the U.S., and several more of the potential cures are wending their way through the development and approval processes.