Mesoblast has exclusive access, with certain exceptions, to Lonza facilities in Singapore for manufacture of allogenic cell therapy products. Lonza will meet Mesoblast's clinical and commercial needs for mesenchymal precursor cell (MPC) products and could construct a manufacturing facility dedicated to this task.
“The cell therapy market is anticipated to become a major growth industry with the potential to mirror the growth we have seen in monoclonal antibodies over the past 20 years,” Stefan Borgas, CEO of Lonza, said.
Lonza has committed to using its intellectual property to cut manufacturing costs for Mesoblast. Capabilities possessed by the contract manufacturing organisation (CMO) will also be used to support development of second generation products.
Australia-based Mesoblast, which in December partnered with Cephalon, has the option to trigger a clause that requires Lonza to build a facility. The purpose-built plant would be dedicated to manufacturing Mesoblast products and in return the stem cell developer would buy agreed quantities from the site.
Mesoblast may also buy the facility. The option to buy the facility at a pre-agreed price is valid for two years after the plant receives regulatory approval. Details such as the size and location of the proposed plant have yet to be discussed publicly.
The deal structure is reminiscent of the agreement Lonza struck with Genentech in 2006. At the time Lonza was building an 80,000 litre plant in Singapore which Genentech gained the exclusive option to buy as part of a supply agreement.
In 2009 Roche, which had recently bought Genentech, acquired the plant for $290m (€213m) and milestone payments of $70m.