Repligen invests $4m at MA facility to support ATF acquisition
The biomanufacturing products supplier Repligen acquired the bioprocessing assets of Refine Technology for $25m in June this year, adding the Alternating Tangenital Flow (ATF) system to its upstream product offering.
The ATF system is a cell retention device used in the fermentation stage of biomanufacturing to increase yields by a cell density of 2-3 times that of alternative technologies, and was described at the time as “the gold standard in the industry” by Repligen.
Five months on and during a conference call to discuss third quarter 2014 results, recently hired CFO Jon Snodgres revealed the firm is expected to spend approximately $6m “which includes $4 million to expand [its] Waltham, Massachusetts facility to accommodate ATF system manufacturing and $2 million to maintain existing facilities and equipment.”
CEO Walter Herlihy added “significant progress” had been made on the integration of Refine, and this expansion would be “substantially” completed by the end of the year, with the facility beginning to assemble ATF products in early 2015.
For the third quarter, the company reported $15.2m in product revenue, a 24% increase compared to the same period last year though increased operating expenses was driven by increased cost of goods associated with higher product SG&A, with the bottom line reporting $1.5m compared to $5.9m year-on-year.
When asked during the call, Snodgres said Repligen received almost $2.2m of revenue from ATF products in the quarter, with Herlihy adding that while “the fourth quarter of the year has historically had the lowest level of product sales due to customers reducing year-end inventory levels, sales of ATF systems, by contrast, “have historically been strongest in the fourth quarter as customers expand their capital equipment budgets.”
Merck KGaA’s acquisition of Sigma-Aldrich
Repligen produces Long epidermal growth factor (LONG R3 IGF-I) - used as supplements for serum-free or low serum culture in cell based therapy applications – for Sigma-Aldrich as part of a long-term supply contract.
With Germany’s Merck Millipore looking to acquire Sigma-Aldrich for $17bn, Repligen’s management team was asked what affect this may have on future business.
“At the most basic level, the contract that we have with Sigma-Aldrich Fine Chemicals is assignable,” said Herlihy. “And so as part of the acquisition, it will be assigned intact to Millipore, so all the rights and obligations will persist after the merger is complete, acquisition is completed.”
He added it is possible that there will be a more rigorous marketing and development effort, a more disciplined sales and marketing effort, but for now – while being pleased with the way the Millipore business has developed over the last few years – it is too early to tell.