Genentech and Lonza Sign Pact for Manufacturing Facilities and Supply

South San Francisco, CA and Basel, Switzerland (Nov. 8)-Genentech, Inc. (South San Francisco, CA, www.gene.com) and the contract manufacturer Lonza Group (Basel, Switzerland, www.lonza.com) entered into an agreement under which Lonza will buy Genentech's mid-scale mammalian biopharmaceutical manufacturing facility in Porriño, Spain, supply certain products to Genentech, and provide Genentech with the option to purchase Lonza's planned biopharmaceutical manufacturing facility in Singapore.

Under the terms of the agreement, Lonza will acquire Genentech's Porriño facility for $150 million. The facility has 40,000 liters of biologics manufacturing capacity and produces Genentech's "Avastin" (bevacizumab). Lonza will use a portion of the 40,000-liter capacity to produce Avastin under a supply agreement with Genentech. The Porriño facility is one of three Genentech plants that are licensed to produce Avastin.

Lonza also will build an 80,000-liter large-scale mammalian biopharmaceutical production facility in Singapore. The facility is expected to be licensed by the US Food and Drug Administration (Rockville, MD, www.fda.gov) in 2010.

Genentech plans to purchase Avastin and other oncology products from Lonza's projected Singapore facility. Genentech also will have the exclusive option to acquire the Singapore facility from Lonza between 2007 and 2012 for $290 million plus an additional $70 million in milestone payments if certain performance goals are met.

The facility will be Lonza's second manufacturing facility in Singapore, where the company is building a second 80,000-liter plant in Singapore, expected to come on stream in 2011.

In parallel, Lonza will progress with building a multipurpose shell for, and reactivating and expanding, a previously mothballed reactor in Portsomouth, New Hampshire. This reactor has 5,000 liters of capacity and is expected to come on stream in 2008. The Portsmouth site currently makes several biopharmaceutical products, including Genentech's "Rituxan" (rituximab).

The companies expect the deal to close before the end of 2006.