Spend, spend, spend: How biopharma consumable suppliers invested through a crisis

At Danaher, spending on additions to property, plant and equipment almost doubled over the first nine months of 2021, rising from $475m to $874m. Having increased capital expenditure by $399m over the first three quarters, the company is on course to spend around $1.5bn over the full year.

Danahar is spending the cash to boost manufacturing capacity for diagnostic testing and biopharma products, including to address demand related to COVID-19. The company, which strengthened its presence in bioprocessing through the acquisition of GE’s biopharma unit, provides a wide range of consumables such as single-use systems through brands including Cytivia and Pall.

In September, Thermo Fisher revealed plans to invest $1bn from 2020 to 2022 to expand its bioproduction capacity. The extra capital expenditure will target cell culture, single-use technology and purification in an attempt to alleviate significant capacity constraints.

That month, Thermo Fisher disclosed work on a new bioproduction facility in Nashville, Tennessee. The facility, one of the largest of its kind in the world, will more than double Thermo Fisher’s capacity to make single-use technologies​ when it opens next year. The investment follows spending on a plant for making single-use technologies in China.

Capital expenditures at Avantor jumped from $41.4m over the first nine months of 2020 to $71.1m over the comparable period of 2021, with almost half of the spending this year coming in the third quarter. The investment has funded the opening of a new single-use facility in the Netherlands and expansions elsewhere, resulting in a fourfold increase in capacity to serve a growing backlog.

Avantor has also expanded inorganically, paying $2.9bn to acquire Masterflex for a portfolio featuring aseptic single-use fluid transfer technologies and other products used in the manufacture of cell and gene therapies, monoclonal antibodies and mRNA vaccines. 

“The single-use fluid transfer space is an area of significant growth for Avantor supported by the expansion of our facilities and our previously announced acquisition of RIM Bio. Our single-use platform has been a key organic revenue driver of bioproduction sales to date and we see this acquisition as a further accelerator of our overall organic revenue growth rate​,” said Avantor CEO Michael Stubblefield on a conference call with investors on October 29.

Repligen stepped up capital spending in 2020 as part of a multi-year plan to ensure it can meet rising demand for consumables including chromatography columns. Spending ramped up in 2021, with the outlay over the first six months matching that of all of last year.

The investments reflect a bioprocessing industry that is confident the jump in demand related to the development and production of COVID-19 drugs and vaccines will transition into ongoing elevated need tied to non-pandemic products.