Merck KGaA to buy gene therapy tools maker for $600M

Dive Brief:

• German drugmaker Merck KGaA agreed to buy Mirus Bio for $600 million to build expertise in a critical part of viral vector-based gene therapy production.
• Merck KGaA is making the purchase through its U.S. and Canadian life sciences unit, MilliporeSigma. The addition will bolster the company’s Life Science division, which offers contract development and manufacturing services.
• Madison, Wisconsin-based Mirus focuses on the development and marketing of transfection reagents, which help introduce nucleic acids into cells. Adding Mirus furthers Merck KGaA’s “ambition to provide a fully integrated and comprehensive solution for viral vector manufacturing,” the company said Wednesday.

Dive Insight:

Merck KGaA’s dual roles as a CDMO and traditional pharmaceutical research company make it increasingly rare in the industry. The company also has an electronics unit with expertise in semiconductors, displays and surface materials.

The purchase of Mirus helps to shore up the company’s offerings in an area of contract manufacturing that has far more demand than supply. There have been more than 20 approvals for viral vector-based cell and gene therapies in the last 10 years, with a projected growth of 30% to 2028, according to statistics cited by Merck KGaA.

Few companies have the facilities to handle the complex production process for these therapies on their own. And even fewer have the ability to build such manufacturing, especially when weighing the cost against the inherently risky nature of drug development. Startups especially look for outside help, leading to a bottleneck in which some developers face waitlists of more than a year.

Mirus says its ”VirusGEN” technology can optimize the transfection process, requiring fewer production runs and offering significant savings for customers. The company is part of Gamma Biosciences, founded in 2019 in partnership with the investment firm KKR. Gamma says it’s invested almost $300 million in businesses focused on biomanufacturing tools and technologies.

Besides Mirus, the Gamma businesses include Nanopareil, BioMagnetic Solutions and Nirrin Technologies. Two others, Univercells Technologies and Astrea Bioseparations, were acquired last year.

Even with volatility caused by inventory destocking and the phaseout of COVID-related demand, Merck KGaA reported more revenue from its unit that offers CDMO services than its traditional healthcare division in the first quarter. Life Science sales totaled 2.14 billion euros, or $2.32 billion, compared with 2.05 billion euros for the healthcare business.

Merck KGaA said it expects the Mirus transaction to close in the third quarter.