The biopharmaceutical market has continued to develop favorably in 2021 and sales are expected to grow in the region of 11% (CAGR 2021 – 2026) across modalities1. The associated increase in demand for outsourcing has led to healthy and sustained growth in the Biologics CDMO market, with a current forecast of 11 to 13% compound annual growth over the next four years2.
This market evolution is being driven by a series of trends including growth in the molecule pipeline as well as new molecular formats and modalities often emerging from small, well-funded biotech. Expedited reviews and the need for speed to market have been pushed even further by the pandemic, combined with an increased focus on supply chain redundancy and preference for domestic development and manufacturing.
The high number of molecules being developed by small and virtual biotech companies is reflected in Lonza’s biologics customer base with around three-quarters representing this group of companies. Smaller companies may not want to build in-house manufacturing capacity or the full range of expertise to bring their candidates to market and choose to outsource a broad range of activities from early-phase in silico optimization to formulation of the final drug product.
The emergence of novel therapies to target unmet medical needs is changing the product landscape. Increasing molecular complexity is creating demand for in-depth expertise in development and manufacturing services along with the technology to enable sustainable expression and scale up of new molecular formats. Platform technologies for bioconjugation or expression of bispecific antibodies for example can significantly accelerate development and production timelines and experienced CDMOs that can help customers accelerate time to market and de-risk investment are in demand.
The development of mRNA vaccines and subsequent manufacturing at a global scale to respond to the COVID-19 pandemic represents a leap forward in Biologics development. Currently, there are around 220 mRNA candidates in development3 and nucleotide-based therapies and vaccines are expected to grow at 62% CAGR (2021-2026)1. The pandemic has focused CDMO activity on rapid scale up of production for commercial supply but the demand for outsourced early-phase development services and technology is growing in line with this new generation of molecules.
2020-2025 CAGR in USD; Source: Frost & Sullivan (2021), Lonza internal analysis
Pharmaprojects (August 2021)
We are a leading contract development and manufacturing partner for biopharmaceuticals, serving our customers throughout their product lifecycle, from preclinical development, through trials, to launch and market supply. We partner with customers of all sizes, from start-ups to large biotechs and major pharmaceutical companies.
Pre-clinical and Clinical Large Molecules 1
Commercial Large Molecules 1
Including mammalian, microbial, bioconjugates and cell and gene therapy products (early development services, drug product services and personalized medicines are included for pre-clinical and clinical molecules only)
We have one of the most complete and flexible CDMO portfolios in the Biologics industry, consisting of mammalian and microbial expression systems as well as capabilities for bioconjugation and mRNA manufacturing. We are expanding drug formulation and drug product development and manufacturing to provide our customers with simplified and de-risked supply chains.
Mammalian remains a major production technology for the biopharma industry. With more than 20 years of experience in mammalian cell culture, we have established a respected and leading position in the mammalian space. We have a fully integrated portfolio of services, from late discovery through to commercial supply.
We also use robust technologies, such as our proprietary GS Xceed® Expression System for mammalian expression. As the pipeline becomes more complex, we have complemented this established platform with other molecular tools, for example PiggyBac™ for stable expression of large DNA cargos and ByLok™ Technology for the discovery and design of bispecific antibodies. By providing a toolbox designed to meet the needs of developing new molecular formats, we can improve speed to the clinic or market while helping to reduce the costs and delays associated with low yields and poor batch quality.
We have an extensive breadth of mammalian manufacturing capacities - from small-scale, single-use systems to mid- and large-scale stainless steel assets across the US, Europe and Asia. We can offer our customers phase-appropriate capacity and respond to the increasing need for regional manufacturing.
Within our Microbial business, we have a presence in every step on the path to commercialization. Microbial cell-derived molecules are produced exclusively in Visp (CH) and customers benefit from more than 30 years of expertise in this technology. Our offering of mid- and large-scale commercial manufacturing is supported by proprietary expression systems. These target the growing biotherapeutics development pipeline and, in particular, certain classes of more complex molecules largely being developed by smaller biotech companies.
We have extensive experience in microbial processes using advanced engineering and process development capabilities. Our toolbox contains well-established technologies for efficient, scalable and regulatory compliant processes. Our XS Technologies® platform for microbial expression includes Escherichia coli, Pichia pastoris and Bacillus subtilis expression systems.
Bioconjugates are a growing class of biopharmaceuticals and another important pillar of our Biologics business. We were among the first CDMOs to support the commercialization of bioconjugates and have a broad and established capability in manufacturing these complex molecules. We offer support activities from late discovery through to commercialization, with all elements of the complex supply chain, including the production of biomolecule, synthetic payload, linker and subsequent conjugation at our Visp (CH) site.
In 2021, we were recognized as best ADC contract manufacturing provider by the World ADC Summit. The award is testament to our simplified supply chain approach for the production of complex ADCs under one roof, making life-saving treatments accessible for our customers and their patients.
mRNA technology and its potential has truly emerged in the past two years. We have pioneered the commercialization of this modality through successful delivery of the Moderna COVID-19 vaccine drug substance. By making considerable pre-investments in our Ibex® concept in recent years, we were able to optimize pre-planned manufacturing capacity, enabling our customer to commercialize at speed during the pandemic.
The potential therapeutic value of mRNA technology is not limited to COVID-19 vaccines. mRNA has the potential to transform the way we manage and treat many illnesses and infections. As we move forward, we are already looking to build on this first-mover advantage to capture future opportunities and complete our offering across the value chain.
Our DPS focus is on parenteral dosage forms, including products for injection and infusion for intravenous, subcutaneous, intraocular and other routes of parenteral administration. Services include options for monoclonal antibodies, other biologics including novel formats, noncytotoxic bioconjugates, peptides, viral vector and small molecules that require a parenteral dosage form.
To meet the growing need for end-to-end services and de-risked supply chains, we are actively expanding our drug product capabilities. We are expanding in Europe and China to further extend the value chain and complement our existing strong development offering in Switzerland.
Ibex® Solutions is a biopark of pre-built facilities supported by a flexible and responsive business model. Three innovative offerings - Ibex® Design, Ibex® Develop, and Ibex® Dedicate - span the complete product lifecycle of a biopharmaceutical from preclinical to commercial stages, from drug substance to drug product, all under one single contract. Our goal is to get new medicines and vaccines to our customers’ patients faster and give customers the flexibility to manage supply, addressing drug development uncertainty and market demand changes.
Ibex® Design and Develop
Ibex® Design and Ibex® Develop cover the development and clinical manufacturing phases, supporting companies preparing for clinical trials up to the launch of their product. Completed in 2021, the facility that houses these offers is highly automated and employs single-use technology (1,000L and 2,000L bioreactors). They deliver clearly defined packages and timelines, essential for small companies with limited time and funds.
Ibex® Dedicate is a fully customizable and flexible manufacturing solution, tailored to the customer’s precise operational and business needs. The offering enables companies with products in late clinical and commercial stages to respond quickly to changes in market demand, de-risk their programs and simplify their supply chain.
The model of a technology-agnostic shell ready for fit-out with a relatively low initial investment has proved its worth for us and our customers, enabling various modalities to ramp up in record time. We now have a multi-purpose facility supporting: large- and small-scale mammalian, microbial, conjugation and mRNA. It serves as a testimony to our breadth of knowledge across modalities.
We continue to increase our presence across geographies to strengthen our integrated, end-to-end approach further. We offer manufacturing services for clinical and commercial material across our sites globally, from small-scale (1,000–2,000L) through mid-scale (3,000L and 6,000L) to large-scale (10,000L, 15,000L and 20,000L). We leverage our expertise in stainless steel, single-use and hybrid technologies to help de-risk the path to market for our customers.
Our Biologics division benefited from sustained customer demand in 2021, with high levels of capacity utilization and batch success rates. The business was able to meet high levels of demand by bringing online new facilities while also approving significant new expansions across multiple modalities.
In 2021 and beyond, our top priorities focus on strengthening our end-to-end offerings, increasing our presence across modalities and geographies, leveraging global capabilities to offer an agile delivery model and enhancing technological edge through further innovation.
Comparison vs. Prior Year
CORE EBITDA (CHF)
CORE EBITDA Margin
Sales growth, expressed as a percentage (%), is at constant exchange rate (CER)
To strengthen our global network and to support market demand and future growth, we continued to invest in new capacities, including in Portsmouth (US), Visp (CH), and Guangzhou (CN).
We announced CHF 850 million of investment to build two new state-of-the-art mammalian facilities in Portsmouth and Visp. In Portsmouth, a new next-generation facility supporting late-phase clinical and commercial development and manufacturing will add capacity for up to eight 2,000L single-use bioreactors. The facility will help meet the increasing market demand for small- to mid-scale mammalian-derived biologics and support the implementation of high titer and high throughput platform processes. Combined with our industry-leading services in process characterization and process validation, the facility will offer customers an optimized path through Biologics License Application (BLA) to market and the flexibility to meet challenges in product forecasting during the initial years of product launch. It is expected to be completed in 2023. In Visp, a new large-scale facility with the latest manufacturing technology will expand capacity by six 20,000L bioreactors to meet increasing market demand for biologics (see more in section Ibex® Solutions).
Another milestone in 2021 was the start of operations at our Guangzhou site. By the end of the year we had delivered our first cGMP batches. Furthermore, as part of our continued investment in China and in line with our strategy to provide integrated end-to-end solutions to customers, we will offer combined drug substance and drug product manufacturing services at the Guangzhou site, expected to come online in 2022 (see more in section Expanding End-to-End Offerings).
In 2021, our Ibex® Solutions offering remained highly attractive to customers. Modules in our first manufacturing complex are now fully allocated. The range of technologies, clearly highlights the value of the concept. Technologies include mRNA, microbial, mammalian and bioconjugation.
Building on the success of our Ibex® Dedicate model, in 2021, we approved investment for additional expansion into a second manufacturing complex in Visp (CH) and work has already started. The investment will provide a new large-scale mammalian drug substance manufacturing facility with six 20,000L bioreactors due to be operational by 2024. A significant proportion of this new capacity is already contracted, including by a major biopharmaceutical partner for large-scale monoclonal antibody supply for antibody-drug conjugates (ADC). This collaboration represents a significant development of an existing customer relationship where we already provide highly potent payload, drug-linker and conjugation services. The partnership enables the customer to access commercial-scale production of all elements of its ADC at one site, ensuring security of supply while delivering significant economies of scale.
We also signed new programs in Ibex® Design and Develop, including with Immunitas Therapeutics, aTyr Pharma and BlueJay Therapeutics. These collaborations are aimed at helping biotech companies to advance their innovative medicines from gene to investigational new drug (IND). For example, as part of our agreement with aTyr Pharma, our Ibex® Design will deliver GMP drug substance and drug product batches to support the company as it advances its novel therapeutic antibody from preclinical to clinical stages.
By combining established expertise across three development sites - Slough (UK), Visp (CH) and Guangzhou (CN) - with leading expression systems and molecular biology tools, we are able to support the specific needs of customers by developing complex molecules and new molecular formats.
For example, we will deliver a program for Ankyra Therapeutics designed to reduce time to clinic for its novel fusion protein, a cytokine-based immunotherapy developed for intratumoral injection.
For production of many new molecular formats such as nanobodies, designed ankyrin repeat proteins (DARPins) and single-chain antibodies, microbial systems may be more productive. As part of our continued focus on expanding the microbial service offering supporting clinical and commercial programs, we also expanded our development laboratories in Visp by 50%. This new capacity will consolidate the microbial footprint at the Visp site and add new high throughput equipment and automation processes to drive efficiency and project delivery.
In 2021, we also continued to drive improvements in our internal innovation portfolio as well as extending partnerships with external innovators to provide a molecular biology toolbox tailored to the changing needs of cell line development and protein expression.
President, Biologics and Cell & Gene Divisions
With strong demand for COVID-19 therapeutics, the development of increasingly complex molecules and higher manufacturing demand for new and existing medicines, we made significant investment in people, assets and capabilities in 2021.
An important focus for 2021 was how to welcome new colleagues and develop our people during the pandemic. We created a comprehensive virtual onboarding program for new joiners, as well as a modular mentoring and training program for existing employees.
We brought new growth projects online despite the ongoing challenges arising from the COVID-19 pandemic. We produced our first batches out of the new mid-scale facility in Portsmouth (US) and first mammalian batches in Visp (CH) and Guangzhou (CN) and brought online development and services capabilities in Visp and Singapore, in addition to our existing centers in the UK and California. We also announced growth initiatives across business units, including in drug product services, bioconjugates, mammalian, mRNA and microbial to ensure the flexibility and breadth of scope of our services and to further develop our integrated offering.
Demand for drug product across all modalities has been high this year with much of the CDMO capacity being reserved for COVID-19 vaccines and increasing demand for integrated offers and speed. As a result, we invested in additional capacity in Switzerland and China, complementing the drug product manufacturing capacity at the Visp site, which is expected to come online in 2022.
Looking to the future, we will continue to evaluate our network across our three key regions (US, Europe and Asia) to balance customer proximity and cost efficiency. We will also ramp up our new mRNA lines in Visp and Geleen (NL). Finally, we will also continue to maintain an active approach to business model innovation, and new technologies to support specific customer needs.
As part of our continued investment in Asia, we expanded our mammalian development services in Singapore. The expansion will double the existing footprint at our labs and establish additional capacity for cell culture, purification and analytical services for mammalian biologics. We will also invest in the latest technology for mammalian processes and analytical development.
During 2021, we fully validated our clinical drug substance facility in Guangzhou (CN) and announced the addition of clinical drug product capacity. This provides a full-service offering targeted to the growing needs of Chinese biotech or other companies wishing to access the Chinese market. The response has been extremely positive and we now count Junshi Biosciences, Pinteon and ValenzaBio among our customers in this fully operational facility.
The collaboration with Junshi Biosciences demonstrated our strengths in providing high-quality and reliable services for local pharmaceutical companies under the CDMO model. The agreement builds on an existing relationship and will accelerate the development and manufacturing of Junshi's various biologics products, including its current and future antibody-based product pipeline. The main production platform will utilize our GS Xceed® Expression System.
Strengthening our Drug Product Services (DPS) offering has been a priority in 2021. To support this, we have announced several key expansions. Since setting up DPS in 2016, we have expanded our offering in Basel (CH), Stein (CH), Visp (CH) and Guangzhou (CN). These new investments enhanced our global drug product manufacturing and fill and finish capacity to three sites, including four vial lines and one flexible filling line.
In 2021, we expanded our network in Switzerland. Our center of excellence for drug product development is based in Basel. We are currently adding more labs to further support the pharmaceutical development for early and late clinical stages and increase our process development and characterization capabilities. Alongside this, in our main drug product site in Stein, we are installing a new aseptic fill and finish line. This investment will allow us to process various modalities, including monoclonal antibodies, bioconjugates, viral vectors, and other gene therapy products. These two investments will complement our Visp site's drug product manufacturing capacity, expected to come online in 2022 as part of the Ibex® Solutions offering.
We are also establishing drug product manufacturing capacity for clinical trial and commercial supply in China by installing a new drug product fill and finish manufacturing line at our Guangzhou site. Expected to be completed in 2022, the sterile, multi-product fill and finish line will support the filling of liquid and lyophilized products. This expansion will establish our capacity to offer our customers in China and worldwide combined drug substance and drug product manufacturing services for clinical trial and commercial supply.
In May 2020, we announced a ten-year strategic collaboration agreement to enable the manufacture of Moderna’s Spikevax COVID-19 vaccine and additional Moderna products in the future. Our initial agreement provided for the installation of three production lines at our Visp (CH) site and one further production line in Portsmouth (US).
In 2021, we further expanded our collaboration with Moderna to extend our mRNA drug substance manufacturing and we announced an additional four production lines, doubling our mRNA production capacity. In Visp, we announced three new production lines, which are coming online in Q1 2022. We also built an additional production line at our site in Geleen (NL), on an accelerated timeline. We were able to leverage our existing infrastructure at the site to provide a fast build-out and ramp-up of operations.
For the rapid development of next generation CHO host cell lines, access to an in-house gene editing technology is critical. CRISPR is a flexible gene editing technique, which facilitates the precise ‘cut and paste’ of DNA in order to engineer optimized production cell lines. In December 2020, we signed an agreement with Arbor Biotechnologies to evaluate their proprietary CRISPR platform.
Based on data from the initial evaluation, we have initiated an extensive research program. We will use the gene editing technology to precisely engineer the production machinery of our proprietary CHO host cell. This will further enhance its capabilities and pave the way for tailored solutions for manufacturing of new molecular formats. Giving our customers access to next generation CHO hosts will enable delivery of cutting-edge therapeutics to address currently unmet patient needs.
Polysorbates are highly efficient protein stabilizers widely used in biotherapeutics. However, their wide industrial implementation is connected to challenges around their degradation. The compounds arising from enzymatic degradation of polysorbates (free fatty acids) pose a significant challenge to the drug product quality and safety because their presence leads to the formation of visible and sub-visible particles.
Our Drug Product Services team has developed and implemented a new rapid test to measure the potential level of polysorbate degradation based on detecting the activity of lipases, enzymes responsible for polysorbate degradation in drug formulations. This new diagnostic tool has been submitted for patent protection and has already helped several of Lonza's customers identify the root cause for polysorbate degradation in their products, aided process improvements and improved product stability and patient safety.