Charles River Laboratories to Acquire Vigene Biosciences to Enhance Gene Therapy Capabilities

Rhea-AI Summary

Charles River Laboratories (NYSE: CRL) announced its acquisition of Vigene Biosciences for $292.5 million in cash, with potential additional payments of $57.5 million based on performance. The deal aims to enhance Charles River's gene therapy capabilities, specifically in viral vector manufacturing, supporting growth in the high-value cell and gene therapy market, which is projected to reach $2.5 billion and grow at 25% annually over the next five years. The transaction is expected to close in Q3 2021, pending regulatory approvals.

Positive

• Expands gene therapy capabilities with Vigene's expertise in viral vector and plasmid DNA manufacturing.
• Enhances comprehensive cell and gene therapy solutions, offering clients a single scientific partner from development to manufacturing.
• Addresses a rapidly growing market, expected to reach $2.5 billion with a 25% annual growth rate.

Negative

• None.

Charles River Laboratories International, Inc. (NYSE: CRL) announced today that it has signed a definitive agreement to acquire Vigene Biosciences, Inc., a premier, U.S.-based gene therapy contract development and manufacturing organization (CDMO) providing viral vector-based gene delivery solutions. The purchase price is expected to be $292.5 million in cash, subject to customary closing adjustments. In addition to the initial purchase price, the transaction includes contingent additional payments of up to $57.5 million based on future performance. The transaction is expected to close in the beginning of the third quarter of 2021, subject to regulatory requirements and customary closing conditions.

James C. Foster, Chairman, President and Chief Executive Officer of Charles River Laboratories, commented, “The addition of Vigene Biosciences’ extensive gene therapy expertise will enable us to expand our comprehensive cell and gene therapy portfolio to span each of the major CDMO platforms – cell therapy, viral vector, and plasmid DNA production. In these emerging, high-growth, value-added segments, we intend to continue to differentiate ourselves by bringing our high-science, customizable approach to support the complex needs of cell and gene therapy developers and innovators worldwide. Our goal is to become our clients’ scientific partner of choice for advanced drug modalities from discovery and non-clinical development to CGMP manufacturing. We look forward to welcoming Vigene’s dedicated employees to the Charles River family.”

Strategic Rationale

The acquisition of Vigene Biosciences will enhance Charles River’s gene therapy capabilities in the high-growth, value-added cell and gene therapy CDMO sector.

• Expands Charles River’s Gene Therapy CDMO Capabilities for Viral Vectors and Plasmid DNA – Vigene offers its clients contract manufacturing solutions across several key gene therapy platforms, enhancing Charles River’s ability to meet its clients’ evolving scientific needs. Its primary area of expertise is CGMP viral vector manufacturing, which is used for gene therapies and gene-modified cell therapies. Vigene has significant expertise in adeno-associated virus (AAV) CGMP production, which is the most commonly used delivery solution for gene therapies, as well as for other major viral vectors, including lentivirus. Vigene also offers high-quality, research grade and CGMP plasmid DNA, which is a foundational tool used in the development of viral vectors for gene-modified cell therapies, gene therapies, and vaccine production.
• Complements Charles River’s existing non-clinical development and manufacturing portfolio – The addition of Vigene will be complementary to Charles River’s existing, non-clinical development and manufacturing capabilities and provide clients access to a comprehensive cell and gene therapy solution. With operations based in Rockville, Maryland, Vigene will geographically expand and be highly complementary to Charles River’s existing gene therapy CDMO capabilities in the United Kingdom and Sweden, which were acquired through the March 2021 acquisition of Cognate BioServices. Vigene will also support Charles River’s existing, U.S.-based cell therapy production capabilities and establish an end-to-end, gene-modified cell therapy solution. In addition, the acquisition will enable clients to seamlessly conduct analytical testing, process development, and manufacturing for advanced modalities with the same scientific partner, enabling them to achieve their goal of driving greater efficiency and accelerating their speed to market for advanced drug modalities.
• Enhances Charles River’s growth potential with increased exposure in the high-growth market sector – Vigene will enhance Charles River’s growth potential by expanding Charles River’s portfolio of comprehensive cell and gene therapy solutions with viral vector and plasmid DNA manufacturing. The addressable market for cell and gene therapy CDMO services, principally for cell therapy, plasmid DNA, and viral vector production, is currently estimated at approximately $2.5 billion globally and is expected to grow at least 25% annually over the next five years.
• Expected to drive profitable growth and shareholder value – The acquisition is expected to generate attractive financial returns that are consistent with Charles River’s disciplined investment criteria. It is also expected to be accretive to Charles River’s long-term revenue and ear

FAQ

What is the value of the acquisition of Vigene Biosciences by Charles River Laboratories?

The acquisition is valued at $292.5 million in cash, with additional contingent payments of up to $57.5 million.

When is the acquisition of Vigene Biosciences expected to close?

The acquisition is expected to close in the beginning of the third quarter of 2021, subject to regulatory approvals.

How will the acquisition of Vigene Biosciences impact Charles River's growth?

The acquisition is expected to enhance Charles River's growth potential by expanding its capabilities in the high-growth cell and gene therapy market.

What strategic advantages does the acquisition bring to Charles River Laboratories?

It allows for a comprehensive cell and gene therapy solution and improves efficiency by enabling clients to work with a single partner for development and manufacturing.

What is the expected market growth for cell and gene therapy services?

The market for cell and gene therapy CDMO services is estimated to grow by at least 25% annually over the next five years.