Lonza confirms "long-term commercial supply agreement" at U.S. biologic drug site

Investing.com - Shares of Lonza spiked in early European trading on Thursday after the Swiss contract pharmaceutical firm confirmed a "significant" long-term commercial supply agreement at one of the world’s largest manufacturing sites for biologic drugs in the United States.

In a statement, Lonza added that the site in the California city of Vacaville, which it acquired from peer Roche in 2024 for $1.2 billion, had experienced "sustained high customer interest."

Lonza said integration of the facility into its global network was "progressing fully in line with plan," showing "strong and consistent operational execution" while "maintaining its excellent quality track record" and "advancing preparations for new product introductions."

An initial phase of capital expenditure is also on track, and more investments will be plugged into Vacaville in the next two to three years to upgrade the site’s automation system and multi-purpose capabilities, Lonza said. The company said last year that it plans to spend roughly 500 million Swiss francs to upgrade the facility, which manufactures monoclonal antibodies from genetically modified living cells in order to produce a new line of treatments.

In a note, analysts at Jefferies argued that the Vacaville announcement was "the most material disclosure" in Lonza’s third-quarter financial results, flagging that some investors had been concerned "with the lack of newsflow" from the firm compared to its competitors.

Lonza reiterated its annual guidance, saying it still anticipates that core earnings margin at its flagship contract development and manufacturing organization unit will stand at 30% to 31% this year.

The group also said it continues to expect no material impact from sweeping U.S. tariffs, given its diversified global manufacturing footprint. U.S. President Donald Trump has threatened to slap a 100% levy on imports of branded or patented pharmaceutical products, unless the drugmaker can show that it is constructing a plant in the United States.

According to Reuters, several large Swiss drugmakers, including Lonza, are anticipated to eventually be exempt from the duties.

Related articles

Lonza confirms "long-term commercial supply agreement" at U.S. biologic drug site

Loading Up HEAVY on These 3 Stocks by End of 2025 (+ 1 New ETF)

Gold: Will Safe-Haven Demand Push Yellow Metal Even Higher?

View Comments