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A biotechnology company that has helped discover novel antibody treatments for drugmakers including Johnson & Johnson has been put up for sale for more than €1bn, as its private equity owners look to cash in on a wave of outsourcing in the sector.
London-based healthcare investor GHO Capital has this year hired advisers from JPMorgan to oversee a sales process for FairJourney Biologics, a contract research organisation that works on behalf of pharma groups to identify novel antibody candidates, according to people familiar with the matter.
FairJourney, whose labs are based in the Portuguese city of Porto and the English city of Cambridge, has contributed to the research behind 14 antibody treatments currently being studied in clinical trials to treat diseases such as cancer and autoimmune diseases.
Earnings before interest, taxes, depreciation and amortisation at the group are projected to reach about €45mn this year on the back of a 50 per cent annual growth rate.
GHO’s decision to put the Porto-based contract research organisation up for sale followed bidder interest, the people said, and comes amid an accelerating shift towards outsourcing in the pharmaceutical sector. Big pharma groups are increasingly selling off labs and manufacturing facilities, and instead leaning on outsourcers to research, develop and manufacture drugs in a bid to limit costs.
Roughly 50 per cent of clinical trials undertaken this year are projected to be partly or fully outsourced, according to an industry survey conducted by consultancy EY-Parthenon. Meanwhile, the contract manufacturing sector is poised to grow faster than the pharma sector at large over the next four years, according to pharmaceutical analytics firm Evaluate.
FairJourney was founded in 2012 by scientist António Parada, who currently serves as chief executive and still has a shareholding in the business, and Maria Gonzalez-Pajuelo. The contract research organisation has a partnership with Argenx, one of Europe’s largest biotechs, to discover new antibody treatments. It has also worked on drug development for US pharma company Johnson & Johnson, Danish biotech group Genmab and British biotech Iksuda therapeutics.
GHO, which has roughly €7bn of assets under management, paid just over €50mn for a majority stake in FairJourney four years ago, according to PitchBook, meaning it stands to make a substantial return from the sale if a buyer is found. The sale could draw interest from a strategic buyer or another private equity group, which have been drawn to the sector by steady profits and cash flow.
“Private equity continues to have a love affair with pharma-adjacent suppliers,” said Robert Darwin, a partner at law firm Sidley Austin and specialist in life sciences transactions.
Private equity groups Bain, Cinven, Carlyle and Permira have all acquired contract manufacturers or contract research organisations in recent years. GHO has also previously invested in Sterling Pharma Solutions, a specialist in the development of antibody drug conjugates, a new kind of cancer drug, and acquired Belgian contract manufacturer Ardena in 2020.
GHO, FairJourney and JPMorgan declined to comment.
