Lonza poaches CEO from rival as it prepares to reap rewards of Roche plant buy

Lonza’s search for a CEO has led the Swiss CDMO giant to its compatriot competitor, Siegfried.

Lonza has poached Siegfried’s helmsman Wolfgang Wienand as its own CEO, the company said Tuesday. The appointment will take effect in the summer of 2024.

Albert Baehny, who temporarily stepped in from his chairman position in October after Pierre-Alain Ruffieux abruptly left, will retire from Lonza after a transition period. Baehny plans to cede his chairman title to Heineken Chairman Jean-Marc Huët at Lonza’s upcoming annual shareholder meeting in May.

The appointment follows years of leadership instability marked by multiple CEO handovers since Richard Ridinger left in early 2019.

The transition also comes as the CDMO giant prepares to reap benefits from a major new acquisition and a U.S. draft bill that threatens to take out some key competitors from China.

About two weeks ago, Lonza unveiled a $1.2 billion deal to acquire a large biologics manufacturing facility from Roche’s Genentech in Vacaville, California, plus plans to invest another 500 million Swiss francs ($550 million) to upgrade the site in the next few years. The deal comes with a contract to continue supplying Roche with drugs currently produced at the site over the medium term.

Based on Lonza’s existing mammalian drug substance capacity and its estimated contribution to the firm’s overall business , William Blair analysts figure the company can generate about 1.6 billion Swiss francs ($1.8 billion) in revenue per year at the acquired Vacaville facility, which has bioreactor capacity of about 330,000 liters.

The facility helps make some of Roche’s key antibody drugs. It serves as the primary manufacturing location for the Swiss pharma’s top-selling product, multiple sclerosis therapy Ocrevus, which brought in 6.4 billion Swiss francs in sales last year. Roche has reserved about 30% of the site’s capacity for its needs next year.

Thanks to the deal, Lonza has dialed up its 2024-2028 guidance to now expect sales to grow around 12% to 15% annually, on average, at constant exchange rates. Last year, the company recorded 6.7 billion Swiss francs in total sales.

Meanwhile, Lonza appears on track to snatch more CDMO business as a proposed U.S. bill dubbed the BIOSECURE Act raises questions over whether the Chinese CRO-CDMO duo, WuXi AppTec and WuXi Biologics, will be able to serve U.S. customers.

The bill still has a long way to go in the U.S. lawmaking process, but it’s achieving its intended goal, which is to force drug manufacturing back to the U.S., the Williams Blair team pointed out in a Tuesday note. Regardless of whether the BIOSECURE Act succeeds or not, the perceived risk of a crackdown is pushing drug developers away from Chinese CROs and CDMOs moving forward, the analysts said.

Lonza is poised to benefit from the BIOSECURE Act given it provides similar services as the Chinese companies. These include support work for small molecules, biologics, and cell and gene therapies. 

By William Blair’s estimates, should U.S. customers choose to abandon the WuXi companies, Lonza stands to grab $2.1 billion of the total $5.6 billion revenue that WuXi AppTec got from U.S. customers in 2023 and $800 million of the $2.4 billion tied to WuXi Biologics’ U.S. business.

Now, Wienand will take the reins of Lonza to ride these tailwinds. The 14-year Siegfried veteran brings “proven leadership capabilities” and “a wealth of knowledge and experience to Lonza, complemented by his deep scientific and strategic expertise,” Baehny said in a statement.