- A healthcare-focused private equity firm has agreed to acquire Vibalogics, a contract developer of biological therapies, to capitalize on what it sees as a growing demand for complex viral-based products.
- Vibalogics and Ampersand Capital Partners didn't disclose deal terms in a May 29 release, but the acquisition does bring 50 employees and a 27,000-square-foot manufacturing facility in Cuxhaven, Germany.
- Ampersand notes on its website that most of its portfolio companies — which have included Brammer Bio and Avista Pharma Solutions — sport revenues between $10 million and $100 million at the time of the firm's investment. Ampersand also says it typically invests between $10 million and $50 million into each company.
Pharmaceutical companies say their return on investment from R&D is getting lower. At the same time, many are also branching into complex areas of drug development, such as cell and gene therapy, where manufacturing costs can be quite high. Combined, the trends are putting pressure on the industry to find cheaper approaches.
Contract services providers have become one of the more favored solutions. But the demand is burdening these providers, in turn pushing them to expand quickly through M&A.
And more recently, Thermo Fisher handed over $1.7 billion to bring Brammer Bio and its viral vector contract manufacturing business into the buyer's pharma services business.
On its end, Ampersand doesn't see the need for complex viral-based products diminishing anytime soon, and has decided to acquire Vibalogics while the field gets hotter. The target company's offerings include fill and finish manufacturing for gene therapies, oncolytic viral therapies and vaccines.
Vibalogics will join the dozen or so companies in Ampersand's portfolio. The private equity firm also lists more than 30 "realized" companies it invested in and which were later acquired.
"Given the exciting developments within the complex virus market this is an excellent time for an investor with deep experience in the viral vector contract manufacturing sector to partner with the company," said David Anderson, general partner at Ampersand, in a statement.