Lonza plots $93M expansion to capsule manufacturing, adding billions of doses per year

Lonza headquarters
Lonza purchased Capsugel back in 2017 in a play at the booming drug capsule market. (Lonza)

When CDMO Lonza shelled out $5.5 billion for capsule maker Capsugel in 2017, it made a big bet the booming capsule market would drive revenue. Now, with demand continuing to grow, Lonza is putting another down payment on capsules to keep up.

Lonza will spend $93 million to expand its capsule manufacturing by 15% across eight sites globally in a move to add more than 30 billion doses per year to its capacity, the Swiss manufacturer said Thursday.

The company's expansion of its Capsugel technology manufacturing comes amid booming demand for capsules in the pharmaceutical and nutritional health fields, Lonza said. Back in 2019, Lonza bumped up capacity in its Capsules and Health Ingredients (CHI) unit, which includes the Capsugel portfolio, by 10% to keep up with demand.

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Lonza's newest investment will be doled out to eight sites including: Bornem, Belgium; Colmar, France; Greenwood, South Carolina; Haryana, India; Jakarta, Indonesia; Puebla, Mexico; Sagamihara, Japan; and Suzhou, China.

The company's capsule growth will allow Lonza to focus on next-gen dosage forms in its CHI unit, which includes lipid multiparticulates and several time-release dosages currently in the research phase, Lonza said.

RELATED: Lonza forecasts $7.9B in annual revenues by 2022, helped by Capsugel buy

When it acquired Capsugel, then a U.S.-based contract capsule and drug producer, for a cool $5.5 billion in 2017, Lonza envisioned major growth ahead as the leading manufacturer of pharmaceutical capsules.

Soon after the buyout, Lonza predicted would hit $7.9 billion in annual revenue by 2022—a number that could still be attainable. In the first half of 2020, Lonza hit $3.07 billion in revenue at about 3.3% growth.

At the time of the purchase, Capsugel touted 3,600 employees and 13 facilities on three continents.

RELATED: Lonza poaches Roche exec for CEO as Moderna COVID-19 collab speeds ahead

Lonza is in a period of change after appointing a new CEO, Roche veteran Pierre-Alain Ruffieux, in June after Marc Funk ended his nine-month tenure in the top spot in November.

The company is working with Maryland biotech Moderna to produce an mRNA-based COVID-19 shot, with the partnership aiming for 1 billion doses per year if the shot secures regulatory approval.