The biopharmaceutical market has continued to expand in 2022 and is expected to grow by a compounded annual growth rate (CAGR) of around 8% over the next five years1. Historically, the biopharmaceutical market pipeline grew 11% per year over the last 10 years2. Positive growth is expected to continue in the future.
Looking at the Biologics CDMO market, the associated rise in demand for outsourcing has led to continued growth, with a current forecast of 12% growth (CAGR) over the next four years3.
We are seeing significant growth in the biologics development and manufacturing pipeline worldwide. An increasing number of new applications for drug approvals are being filed by emerging and small biotechs. These early-stage companies usually do not have in-house capacity on which to rely for early testing, scale-up development and manufacturing. For these customers, collaborating with a well-established CDMO can significantly simplify the development process and supply chain, in addition to improving speed and success rates across a wide range of modalities.
The market is continuing to drive progress with new molecular formats and modalities emerging to target unmet medical needs. These new advances create demand for development and manufacturing expertise. The increasing complexity of the molecules entering the clinical pipeline is driving demand for experienced CDMOs that can help customers in drug development de-risk investment and accelerate time to market.
A rising number of more complex biomolecular formats are entering the global pipeline. These include bioconjugates, fusion proteins, recombinant proteins, and bispecific antibodies (bsAbs). In this context, the need for a deeper and earlier understanding of the biological mode of action is becoming more important. The resulting demand for services to develop and manufacture these complex biomolecules is expected to rise proportionately in the coming years.
BsAbs may be described as molecules that recognize two different antigens or epitopes, compared to conventional monoclonal antibodies (mAbs) that can only recognize one. Bispecific antibodies range from small proteins – two linked antigen-binding fragments – to large molecules with other attached domains. This biotherapeutic class offers improvements in treatment precision and flexibility. Specifically, bsAbs may play a meaningful role for patients receiving cancer care, by creating a more accessible form of treatment for patients who are unable to travel to receive care. It appears that bispecific proteins and other complex protein formats will come to dominate the drug development pipeline in the next five to ten years.
Looking at drug product sales, the market has historically been dominated by oral dosage forms for small molecules, but there is an increasing focus on injectable forms, driven by biologics. These injectable forms look set to become the largest drug product market segment over the next three years. Such a shift in market tectonics is expected to lead to a significant market need among pharma and biotech customers for CDMO support in the fill and finish space4.
Evaluate Pharma “2022 World Preview Report” (2022)
Citeline Trend Analysis (2022)
Frost&Sullivan - Growth Opportunities in Biologics Contract Development and Manufacturing Market, 2022
Evaluate Pharma (2021)
As a leading CDMO for biopharmaceuticals, we serve our customers across their product lifecycle from pre-clinical development, through trials, to launch and market supply.
Pre-clinical and Clinical Large Molecules1
Commercial Large Molecules1
Including mammalian, microbial, bioconjugates and cell and gene therapy products (personalized medicines are included for pre-clinical and clinical molecules only, early development services are included for pre-clinical molecules only)
Our portfolio is one of the most complete in the Biologics industry. It includes mammalian and microbial expression systems, as well as capabilities for bioconjugation and mRNA manufacturing. We are currently expanding drug formulation and drug product development and manufacturing to provide our customers with simplified and de-risked supply chains. We are also investing in innovation to support our customers with leading development services, and other manufacturing technologies, such as perfusion or conjugation capabilities.
Mammalian is and will remain a critical manufacturing technology for the pharma and biotech industry. We hold a leading position in this space, backed by more than 30 years of experience in manufacturing mammalian cell culture. Alongside this established track record, we provide an integrated range of services that span late discovery to commercial supply.
As the pipeline for mammalian expression becomes more complex, we use our proprietary GS Xceed® Expression System in combination with other molecular tools, such as GS PiggyBac® for stable expression of large DNA cargos and bYlok® Technology, for the discovery and design of bsAbs. These molecular tools have been designed to meet the needs of new and complex molecular formats. They carry multiple customer benefits by improving speed to market as well as helping to reduce costs and delays that may arise from low yields or poor batch quality.
Our extensive mammalian manufacturing capacities include small-scale, single-use systems to mid-scale and large-scale stainless steel assets. With facilities located across the US, Europe and Asia, we can offer our customers phase-appropriate capacity and can respond to the increasing need for regional manufacturing hubs.
Within our Microbial business, we support customers at every step on the path to commercialization, including strain development, cell banking, process development, and process optimization. With more than three decades of experience manufacturing microbial products at our Visp (CH) site, along with our established regulatory expertise, we have an unparalleled track record of delivering commercial supply. Our proprietary XS Technologies® expression systems support our mid-scale and large-scale commercial manufacturing offerings. These expression systems target the biotherapeutics pipeline, which continues to show sustained growth. They also support multiple classes of more complex molecule development projects to meet the specialized needs of smaller biotech customers.
Our microbial customers also benefit from our extensive experience and capabilities in advanced engineering and process development. Our toolbox can deliver a scalable, efficient and compliant process with established and reliable technologies. Our XS Technologies® platform for microbial expression includes Escherichia coli, Pichia pastoris and Bacillus subtilis expression systems.
As one of the first CDMOs to support the commercialization of bioconjugates, we have a broad and established capability in manufacturing these complex molecules. Representing a growing class of biopharmaceuticals, they are an important pillar of our Biologics business. Our offering covers all elements of the complex supply chain, from late discovery through to commercialization, including the manufacturing of monoclonal antibodies, linkers and payload, and other components. We support the development and manufacturing of protein modalities, including the option for early tuning and de-risking. The offering includes the synthesis and purification of small molecule linkers and payloads prior to bioconjugation, supported by a toolbox of modality-agnostic technologies. The bioconjugation toolbox concept offers our customers access to a selected range of robust and scalable advanced technologies that meet the unique needs of these complex molecules.
mRNA technology has the potential to transform the way we manage and treat many illnesses and infections. We pioneered the commercialization of this modality through the successful delivery of the drug substance for Moderna’s COVID-19 vaccine. The possibilities for this technology have truly emerged in the last three years and we are working to capture future opportunities by completing our offering across the value chain. To support this ambition, we are building additional mRNA and lipid nanoparticle (LNP) process and analytical development labs, as well as clinical cGMP capabilities at our site in Geleen (NL). These expanded development services are expected to come online at the beginning of 2023, with cGMP readiness scheduled for early 2024.
Our Drug Product Services (DPS) offering focuses on parenteral dosage forms. Our portfolio includes products for injection and infusion for intravenous, subcutaneous, intraocular and other routes of parenteral administration. Our integrated modality-agnostic offering and extensive regulatory expertise can support monoclonal antibodies as well as other biologics including novel formats. It also supports noncytotoxic bioconjugates, peptides, viral vector and small molecules.
Ibex® Solutions comprises a series of advanced manufacturing facilities which combine to form an extensive biopark in Visp (CH). The facilities are supported by a flexible and responsive business model with three innovative offerings: Ibex® Design, Ibex® Develop and Ibex® Dedicate. These three offerings span the complete product lifecycle of a biopharmaceutical from pre-clinical to commercial stages, from drug substance to drug product. Our Ibex® customers benefit from a complete and tailored portfolio of services under a single contractual framework. Ibex® Solutions enables our customers to bring their new medicines and vaccines to their patients at speed, while providing the flexibility to actively manage supply constraints, drug development uncertainty and market demand changes.
Ibex® Design and Develop
Biologics development and clinical manufacturing phases are covered by Ibex® Design and Ibex® Develop. These offerings support companies at any stage from clinical trials up to product launch. Completed in 2021, the facilities benefit from high levels of automation and employ single-use technologies (1,000L and 2,000L bioreactors). Ibex® Design and Ibex® Develop are focused on supporting customers with limited time and funds by providing clear timelines and defined packages.
Ibex® Dedicate provides a flexible manufacturing solution, which can be customized to our customers’ specific operational and commercial needs. With the support of Ibex® Dedicate, customers with products in late clinical and commercial stages are able to manage risks by responding dynamically to changes in market demand by simplifying their supply chain. Multiple modalities have been able to ramp up in record timeframes using Ibex® Dedicate shells. These are technology agnostic spaces that are ready for fit-out with a relatively low initial investment. Our multi-purpose facilities currently support a broad range of customer needs across large-scale and small-scale mammalian, bioconjugation, microbial and mRNA.
We are a full service CDMO, active across a wide range of Biologics modalities, including mammalian, microbial, bioconjugates, mRNA and drug product services to the biotech and pharma industry. Throughout 2022, we continued to further strengthen our integrated end-to-end approach and expand our global network to match market and customer needs.
In particular, we offer clinical and commercial manufacturing services across our global network, from small-scale (1,000 to 2,000L) through mid-scale (3,000L and 6,000L) to large-scale (10,000L, 15,000L and 20,000L). Our expertise in stainless steel, single-use and hybrid technologies, and development and innovation capabilities helps our customers to de-risk the path to market.
In 2022, strong sales growth in Biologics was supported by a robust underlying performance and a peak in COVID-related sales. The business experienced sustained levels of customer demand for commercial capacity. By bringing new facilities online during the year, such as the 6K mid-scale mammalian facility in Portsmouth (US), and building new capacity, including the large-scale mammalian facility in Visp (CH), we will continue to meet sustained customer demand. As an example, in a new agreement with GSK, we will commence activities to manufacture a marketed product in our 20K mammalian facility. This marks the beginning of a wider strategic partnership with GSK.
We also approved a series of significant new expansions across multiple modalities, including a commercial drug product facility in Stein (CH).
Looking to 2023, our top priority is to continue to provide strong manufacturing and development expertise to our customers and deliver on our ambitious growth projects across modalities. We will also work on continuing to leverage our expertise in product introductions and technology transfers to optimize current capacity. Finally, we will maintain targeted investment in internal and external innovation to strengthen our technology offering.
Comparison vs. Prior Year
CORE EBITDA (CHF)
CORE EBITDA Margin
Sales growth is at constant exchange rate (CER)
With pressing clinical needs and the biotech sector facing tight funding schedules, getting new molecules into the clinic quickly is critical. In 2022, we launched two new DNA to Investigational New Drug (IND) service offerings aimed at supporting innovative biotech companies. For standard monoclonal antibodies (mAbs), we now offer material for toxicity studies in five months and for IND filing in 11 months. For more complex bsAbs, we can offer unprecedented timelines of seven and 13 months to toxicity and IND, respectively. In addition, we are creating more flexible offers for customers that have specifics needs for their complex molecular formats.
These timelines are achieved through our experienced development teams and our proprietary GS piggyBac® cell line engineering technology together with GSv9® Media and Feeds, as well as high throughput systems such as the Beacon™ Optofluidic Technology.
To strengthen our clinical manufacturing offering, we continued to build new mammalian capacity in Portsmouth (US). The expanded facility, complete with six 2,000L n-1 perfusion-enabled bioreactors, is expected to be due for completion in 2023. In Singapore, we completed the expansion of an additional 1800m2 of lab space at the end of 2021 and this came online earlier in 2022.
We support the specific needs of customers with leading expression systems and molecular biology tools. This is achieved by combining established expertise across our four development sites in Slough (UK), Visp (CH), Singapore (SG) and Guangzhou (CN).
We are committed to developing a toolbox of expression systems for all types of business that can license our technology platforms for use in-house. For example, we entered into a licensing agreement with Luzhu Biotechnology Co., Ltd., for the use of our GS Xceed® Gene Expression System with GS piggyBac® transposon technology, for the development of scalable, robust and reliable expression processes.
At the beginning of the year, we announced the launch of our new design and discovery platform bYlok®. This new engineering approach for bsAbs has the potential to streamline future clinical manufacturing. The bYlok® technology was developed to meet the challenge of designing, developing and manufacturing bsAbs molecules at scale without implications of cost and time to market.
We also extended our Early Development Services in Cambridge (UK) to include bioconjugates, launching integrated solutions for molecule design, lead generation and optimization. The extended offering provides unique tools to assess the manufacturability and immunogenicity of proteins and protein engineering tools for the protein part of bioconjugates.
We announced an investment of approximately CHF 500 million to build a new large-scale, commercial drug product facility in Stein (CH). This investment fulfills our strategic commitment to complete the value chain in Biologics, so that customers can benefit from an end-to-end service. This is achieved through an integrated model, to increase flexibility, simplicity and speed to market.
The new flexible facility will be constructed on the same campus as our current clinical drug product facility, allowing us to leverage our existing infrastructure, capabilities and talent.
President, Biologics Division
Demand for commercial capacity has been strong and sustained throughout 2022. We are investing in commercial assets, backed by customer agreements across modalities including mammalian, microbial and conjugation. The ramp-up of new facilities continued in 2022, including our mid-scale 6K mammalian facility and the opening of two new bioconjugates suites. We are making progress on the commissioning of our mid-scale microbial facility and the build-out of our new large-scale facility in Visp (CH), supported by strong customer demand. We also saw continued interest in Ibex® Dedicate, providing customized solutions across different technologies and much-needed flexibility during late-phase trials.
We are investing in innovation and developing our early clinical offering for pharma and biotech customers, to ensure the support of our global network for the migration of molecules through clinical stages. Alongside our new bYlok® bispecific pairing technology, we added new development capabilities in Slough (UK) for the discovery and design of complex proteins. We are also enabling biotech customers to unlock faster timelines, from gene to Investigational New Drug (IND) filing in 11 months for classic mAbs and 13 months for bispecifics, in addition to customized solutions tailored to specific customer needs. Finally, we continue to build our end-to-end network as we invest in commercial drug product capacity and ramp up additional drug product lines in Stein (CH), as well as conjugation capacity and capabilities in Visp (CH).
Customer needs continue to evolve and market demand fluctuates in line with a general market slowdown in clinical trial recruitment and biotech funding. In this context, we are building flexibility into our offer and network, enhancing our capabilities and investing in our people. These combined efforts will ensure that we are ready to adapt to shifts in customer expectation and market need.
Looking ahead to 2023, our priority is to continue on our strategic journey: building our global network across modalities, end-to-end offering and clinical development expertise. We will continue to ramp up new assets and deliver against our planned growth. Our goal is to provide full lifecycle support, from preclinical development through trials to commercial launch. Whether our customers are developing innovative mRNA therapies or complex bioconjugates, we will continue to support them with best-in-class facilities, innovative technologies and talented people across the network.
In 2022, our Ibex® Solutions offering remained highly attractive to customers. Modules in our first manufacturing complex are now fully allocated. The range of technologies housed in the first complex – including mRNA, microbial, mammalian and bioconjugation – clearly highlights the broad value of the concept.
Building on the success of our Ibex® Dedicate model, we announced the opening of a new, custom-built, bioconjugation facility within Lonza’s Ibex® Dedicate manufacturing complex in Visp (CH).
The facility will play a key role in the scaled manufacturing of Kodiak’s lead therapeutic candidate KSI-301 to support a potential global commercial launch. Once fully operational – and if the therapy is approved for commercial use – the facility is expected to have the capacity to supply over 10 million dose equivalents of KSI-301 annually. The strong relationship between Kodiak and Lonza has led to a multi-year commercial collaboration.
We are expanding our capabilities in mRNA to support market growth and customer demand. We are building additional mRNA and lipid nanoparticle (LNP) process and analytical development labs, as well as clinical cGMP manufacturing capabilities at our site in Geleen (NL) to meet the demand of biotech with early clinical pipelines. These investments are designed to support the next generation of mRNA therapies. The start of development activities and tech transfers is expected in Q3 2023 with cGMP readiness scheduled for early 2024. In addition, fill and finish for LNP-encapsulated mRNA is expected to be available from Q1 2024 from our Stein (CH) facility.
In 2022, we also announced a collaboration with Touchlight to expand our end-to-end offering for mRNA manufacturing with an additional, differentiated source of DNA raw material, Touchlight Doggybone DNA (dbDNATM).
Access to this technology expands the options for our customers beyond the traditional method of working with plasmid DNA (pDNA), while continuing to benefit from our integrated mRNA manufacturing offering.
Continuing to develop modern gene editing tools may ultimately lead to significantly improved platforms for protein expression. Access to a gene editing technology is critical for developing next-generation host cell lines. One example is the use of clustered regularly interspaced short palindromic repeats (CRISPR), a flexible gene editing technique that enables a precise “cut and paste” of DNA to engineer optimized production cell lines.
Our R&D Cell Engineering team in Cambridge (UK) has evaluated several CRISPR-Cas-based nuclease platforms and initiated an extensive research program to develop the enhanced next-generation Chinese hamster ovary (CHO) cell line. Microbial R&D in Visp (CH) has produced the CRISPR-Cas proteins for evaluation and then transferred production to an external supplier to secure long-term supply for the production of these enhanced cell lines. Expected to be launched in 2023, our new cell lines will enable customers to deliver cutting-edge therapeutics that address unmet patient needs.
The number of bispecific antibodies in development is accelerating due to their broad therapeutic applications and benefits. Generating these complex biomolecules can, however, be challenging. Downstream processing requires specialized processes that can be time and resource intensive, as multiple cell lines are often required to produce one product.
For an IgG-type bispecific molecule, mispairing of the heavy chain (HC) and light chain (LC) can yield multiple combinations of incorrectly paired molecules. Up to ten pairing variations from two independent parental antibodies are possible, with only one being the intended molecule. This year, we launched the patented, proprietary platform technology bYlok®, which solves the assembly challenge associated with these sophisticated molecules. The bYlok® technology was recognized as one of the best innovations of 2022 by The Medicine Maker.
The bYlok® technology provides an elegantly engineered approach that drives correct HC-LC pairing by introducing simple disulfide bond modifications. bYlok® technology can be used on existing Fc-based bispecifics, and it allows for expression from a single cell line and purification using standard downstream processing steps. This increases manufacturing efficiency, and eases downstream processing and purification. In studies, our R&D team combined bYlok® technology and our proprietary GSquad™ vector system to generate cell lines that express high concentrations of bispecific antibodies. Such a positive outcome from this integrated technological approach demonstrates the strength of our analytical capabilities.