GENE and cell therapy firm Oxford Biomedica has reached a deal with Institut Mérieux to acquire ABL Europe in exchange for a 3.3 per cent stake in the London-listed company as it looks to ramp up manufacturing.

Institut Mérieux plans to increase its share in Oxford Biomedica, which helped produce the Oxford- Astrazeneca Covid-19 vaccine, to around 10 per cent by the end of next year.

Oxford Biomedica said the acquisition of ABL Europe would help it meet increased client demand and broaden its international presence by creating a "footprint" in the European Union through sites in Lyon and Strasbourg.

ABL Europe specialises in manufacturing viral vectors and has forecasted revenues of around €15 million for the year ending 31 December 2023.

Its service suite includes the production of bulk drug substances, the precise fill-finish of drug products, robust process and assay development, bioanalytical testing for product release, and comprehensive regulatory guidance.

Oxford Biomedica's shares have fallen almost 64 per cent this year, partly driven by a drop-off in Covid-19 vaccine demand.

The transaction is set to be completed in the first quarter of 2024, subject to regulatory approval, and Oxford Biomedica will subsequently update its earnings guidance.

"We will now be establishing a significant presence in the EU, while also freeing up Oxford Biomedica's capacity to better serve our growing client demand worldwide," said Dr Frank Mathias, chief executive of Oxford Biomedica.

"We look forward to realising the operational and commercial synergies of this acquisition in 2024 and beyond."

Markets responded positively, with shares closing up 3.57 per cent.

(c) 2023 City A.M., source Newspaper