Lonza to Buy Five Merck KGaA U.S. Plants, Targeting Mid-2027 Close

By Sophie Lindqvist

Lonza agreed to buy five U.S. manufacturing plants from Merck KGaA, with CEO Wolfgang Wienand’s price view near the midpoint of CHF100 million ($122 million) to CHF600 million ($732 million) and closing set for mid-2027.

The broader transaction value was described as falling in the low- to mid-triple-digit millions of Swiss francs. During a Tuesday analyst call, Wienand said a figure “somewhere in the middle” of the range “would be roundabout the right view on the acquisition price.”

The Swiss contract development and manufacturing organization said the acquired capacity spans bioconjugation, high-potency payload-linkers, viral vectors and aseptic fill-finish production.

• St. Louis, Missouri: bioconjugate plant.
• Madison and Verona, Wisconsin: high-potency payload-linker facilities.
• Carlsbad, California: viral-vector plant.
• Indianapolis, Indiana: aseptic fill-finish site.

What does the purchase add to Lonza’s U.S. capacity?

Together, the sites establish end-to-end U.S. drug-substance manufacturing for antibody-drug conjugates. Lonza’s ADC capabilities currently center on Visp, Switzerland; St. Louis adds bioconjugation, while Madison and Verona add high-potency payload-linkers.

Carlsbad contributes viral-vector production and Indianapolis an aseptic fill-finish site, giving Lonza a broader U.S. service set across drug substance and sterile filling.

Lonza expects end-to-end U.S. ADC drug-substance manufacturing to let it engage customers earlier, carry more programs and offer clinical- and commercial-scale options on both sides of the Atlantic. Those benefits remain management expectations rather than disclosed customer wins.

William Blair analysts, in a Tuesday morning note to investors, called the acquisition highly attractive and said it would strengthen Lonza’s competitive position across several high-growth modalities and prepare its next growth phase. About 1,100 employees will transfer, and after closing Lonza expects more than 6,000 people across nine U.S. sites, more than doubling its U.S. manufacturing footprint.

What do the sales and margin forecasts require?

Lonza projects the acquired sites will contribute about CHF250 million ($305 million) in sales in 2028. It expects the facilities initially to operate at lower profitability than Lonza does today, then reach margin parity with the rest of the business at peak sales in the mid-2030s.

The timetable depends on higher capacity use, a wider customer pipeline and market growth. Wienand said utilization was well below the level Lonza believes it can achieve, and he expects integration to increase utilization, sales and profitability progressively.

Lonza estimates the global bioconjugation market at about $30 billion currently and $110 billion by 2033. The company gave no methodology for that estimate and disclosed no utilization baseline, site-level sales split or numeric margin target, limiting independent testing of the forecast.

For portfolio planning, the CHF250 million 2028 figure is a company projection rather than a reported operating result. Margin convergence depends on the sites attracting enough third-party programs to lift utilization before their mid-2030s peak-sales phase.

How does this differ from the Roche transaction?

In 2024, Lonza acquired a U.S. plant from Roche and agreed to supply the drugs Roche produced there. The Merck KGaA transaction carries no comparable stated supply commitment.

During the analyst call, Christian Seufert, Lonza’s head of advanced synthesis, advised against assuming an agreement with Merck KGaA and said “the business was primarily focused on third-party sales and third-party revenue.”

Lonza therefore presents the five sites as third-party capacity rather than a captive Merck supply line. The source names no anchor customer for the acquired plants, making customer conversion and program qualification central portfolio variables.

The two transactions are separated by almost three years.

What can proceed while the sites are integrated?

Lonza says it has the bandwidth to assess other acquisitions in parallel with the Merck KGaA agreement. Wienand said the company would not hesitate to act on an attractive takeover target while integrating the five U.S. sites.

The present transaction remains scheduled to close in mid-2027. Management’s disclosed sequence is integration and customer additions first, sales reaching about CHF250 million in 2028, and margin parity at peak sales in the mid-2030s.

For R&D and portfolio managers, the decision hinges on whether added bioconjugation, payload-linker, viral-vector and fill-finish capacity attracts third-party programs quickly enough to lift utilization. Until closing and subsequent operating data arrive, the sales target, utilization gain and margin convergence remain forecasts rather than demonstrated performance at the acquired sites.