The Waltham, Massachusetts-based company acquired the bioprocessing assets of Refine Technology yesterday for $20.5m (€15m) plus 215,000 shares and has adding Refine’s Alternating Tangential Flow (ATF) System to its upstream bioprocessing product range.
The system is a cell retention device used during the fermentation stage of biologic drug manufacturing to increase production yields. The system is connected to a fermenter providing means to continuously remove waste products in the vessel, enabling the cells to grow to a density 2-3 fold greater than alternative methods in standard batch fermentation, Howard Benjamin - Repligen’s VP of Business Development – explained in a call to investors.
“Over the last ten years the ATF system has become the gold standard in the industry and is currently used in several FDA approved commercial processes,” he said, with CEO Walter Herlihy adding multiple top 10 biopharma companies were already using the system to benefit from the higher yields and lower costs due to its greater efficiency.
Whilst there are other products on the market that use a tangential flow – a method of filtration where the feed flow travels tangentially across the surface of the filter, rather than into the filter – the ATF system’s action of a diaphragm moving upwards and then downwards within a pump head is “better able to handle the flow of cells in a safe and competent fashion in high yields,” according to Benjamin.
Furthermore, it “has been used in a number of [commercialised] products,” Herlihy added. “It is the most widely used technique to retain cells in a fermenter and remove waste product versus all the others combined.”
“Diamond in the rough”
The acquisition was described as “highly complementary” by both the management and Jefferies analyst Brandon Couillard, adding a third product line to Repligen’s portfolio currently led by its Protein A products which are critical reagents used in the purification of monoclonal antibodies.
However, on top of strengthening its brand and extending its technology base, Repligen has predicted the addition of the ATF system will see revenue growth of around 15%, adding an additional $8-9m of sales in 2015, and Herlihy said the firm already had plans to develop the product further.
“It’s clear to us this is a diamond in the rough. It is a market leading technology, clearly an application that is growing in use and when we develop the full product we think we can achieve double digit growth that is sustainable.”
In the next nine months Repligen plans to transfer the manufacture of the ATF system from Refine’s facility in New Jersey to its Massachusetts plant, at a cost of $1.5m. However, as the biopharma industry seeks new ways to increase manufacturing efficiencies and reduce costs Benjamin spoke of a number of increased opportunities, including a single-use version of the system.
“We intend to develop a single-use version of the ATF product line based on requests from customers who have built factories around SU technology,” he said, adding the firm expected to launch this product line in 2015.