REUTERS: Contract drugmaker Catalent Inc said on Monday it would buy privately held Paragon Bioservices Inc for US$1.2 billion in cash, bolstering its capabilities to make gene therapy drugs for its biotech clients.
Most emerging drug companies lack the resources to manufacture drugs and rely on contract organizations such as Catalent and Paragon to make the drugs using their technology. The deal comes less than a month after Thermo Fisher Scientific Inc signed a US$1.7 billion deal to buy gene therapy contract manufacturer Brammer Bio.Evercore ISI analyst Ross Muken said the M&A activity is likely to continue and expects contract manufacturers to expand their gene therapy capabilities due to the potential of these treatments to drive the next major leg of industry growth.
The company intends to fund the deal with proceeds from a US$650 million incremental term loan and issuance of US$650 million of a new series of convertible preferred stock.