TOKYO (Reuters) - Japan’s Fujifilm Holdings Corp will buy a drugmaking business from U.S.-based Biogen Inc for about $890 million to try to bolster its healthcare business as growth at its legacy photocopy operations stagnates.
The unit holds Biogen’s biologics manufacturing operations in Hillerød, Denmark and about 800 employees at the subsidiary are expected to continue employment under Fujifilm, Biogen said in a statement on Tuesday.
Fujifilm, known for its photocopier and imaging products, has been slowly expanding into healthcare. Last year the company said it would buy two biotechnology units from compatriot JXTG Holdings Inc for about $800 million.
While imaging and healthcare brought in nearly the same amount of revenue for the nine months until December, the latter grew at a much faster pace.
It recorded 11 percent year-on-year growth in that period while the imaging service posted 2 percent growth.
“We will expand our contract development and manufacturing organization (CDMO) business with 20 percent growth rate which is higher than it has been,” Fujifilm president and chief operating officer Kenji Sukeno told reporters.
The Japanese company expects the acquisition of the Biogen unit Denmark Manufacturing ApS - equipped with six 15,000 liter bioreactors that make biologic drugs derived from cell culture - to be completed in August. The bioreactors can produce blockbuster drugs or biosimilars that need mass production.
CDMOs undertake development and manufacturing for other drugmakers on a contract basis. The Danish unit will become the fourth such site for Fujifilm and will also continue producing drugs for Biogen after the deal closed, the companies said.
After the acquisition, Fujifilm aims to achieve its 100 billion yen ($900 million) revenue target in its CDMO business by 2021, two years ahead of its original goal. The business is expected to earn about 40 billion yen in fiscal 2018.
($1 = 111.3700 yen)
Reporting by Takashi Umekawa; Editing by Christopher Cushing, Sayantani Ghosh and Keith Weir