Patheon buys Roche's Xeloda API plant and signs supply deal

The facility in question is in Florence, South Carolina. At present it produces a variety of active pharmaceutical ingredients (API) – including the active for the chemotherapy Xeloda (capecitabine) – and the chemical intermediate for the anaemia drug Mircera (methoxy polyethylene glycol-epoetin beta).

Financial details of the transaction were not disclosed. Patheon confirmed it will supply Roche with ingredients. The firm explained that the Roche contract will allow it to pay costs associated with running the site.

A Roche spokeswoman told us Patheon will be hiring the 200 staff currently employed at the site, adding that: “The transfer and full ownership is planned to be completed within 60 days​.”

This was confirmed by Patheon, which told us “We are not just adding the facility to our network, Patheon gains 200 skilled professionals to support API production​.”

The contract manufacturing organisation (CMO) also confirmed it will transfer clients’ projects to the facility over the next few years.

“With this agreement, Patheon will bring business from our clients and utilize the capacity and capabilities to its full potential.  Additional capacity and strengthening the company’s ability to meet clients’ needs are the primary drivers for this acquisition​.”

Analyst view​

William Blair analyst John Kreger told investors a “nominal” amount for the facility.

He also suggested Patheon may pursue similar deals in the future, explaining “If successful, we suspect this could serve as a model for other similar transactions with biopharma clients interested in lowering their internal fixed cost base​.”

However, Kreger cautioned that: “The challenge will be that sites typically off-loaded by pharma companies are the least efficient. So we do not assume this deal will be accretive in the first year​.”