Lonza to Acquire Five Merck CDMO Sites in US, More Than Doubling Manufacturing Footprint

Swiss pharmaceutical manufacturing company Lonza has signed a definitive agreement to acquire five contract development and manufacturing organization (CDMO) sites in the United States from Germany's Merck KGaA, expanding its American manufacturing network and strengthening its capabilities in complex drug production.

Announced on November 3, 2026, the transaction will increase Lonza's US CDMO site count from four to nine and bring approximately 1,100 employees into its workforce. The acquired operations will add development and manufacturing capabilities in areas including bioconjugates, high-potency payload-linkers, viral vectors and advanced drug-delivery technologies.

Lonza described the transaction's total enterprise valuation as being in the low-to-mid triple-digit millions of Swiss francs. Reuters reported that the purchase price was around the midpoint of a CHF 100 million to CHF 600 million range. The companies have not announced a single exact purchase-price figure in their official releases.

Completion is expected in mid-2027, subject to customary closing conditions and regulatory approvals. Until then, the acquired operations will continue to operate within Merck's Life Science business. [1][2][3]

Five US sites expand Lonza's manufacturing network

The agreement covers five manufacturing locations across four US states. Each site brings specialised capabilities that complement Lonza's existing contract manufacturing operations.

The facilities are:

• St. Louis, Missouri: Bioconjugate manufacturing.
• Madison, Wisconsin: High-potency payload-linker manufacturing.
• Verona, Wisconsin: High-potency payload-linker manufacturing.
• Carlsbad, California: Viral vector solutions, including aseptic fill-finish capabilities.
• Indianapolis, Indiana: Lipid nanoparticles, liposomes and PEGylated protein solutions, including aseptic fill-finish capabilities.

These capabilities support the development and production of increasingly complex medicines. For example, antibody-drug conjugates combine an antibody with a therapeutic payload to help deliver treatment to targeted cells. Their production requires specialised processes and strict quality controls.

Viral vectors are used in certain gene therapies to deliver genetic material into cells. Manufacturing these products requires specialised facilities and processes that differ from conventional pharmaceutical production.

The acquired facilities will allow Lonza to offer customers a wider range of services, from clinical development and manufacturing through to commercial production. [1][2]

Why the acquisition matters for Lonza

The deal strengthens Lonza's presence in the United States, a major market for innovative pharmaceutical development and manufacturing.

CDMOs provide development and production services to pharmaceutical and biotechnology companies that may not have sufficient manufacturing capacity or specialised facilities of their own. Customers can outsource some or all of the manufacturing process instead of investing in their own production infrastructure.

Demand for these services is supported by the development of biologics, targeted cancer therapies, cell and gene therapies, and other complex medicines.

By acquiring established sites, Lonza gains access to existing facilities, specialised equipment, technical expertise and experienced employees. This can provide a faster route to expanding manufacturing capacity than building new facilities from the beginning, although integration and customer demand will determine how quickly the additional capacity contributes to growth.

Lonza CEO Wolfgang Wienand said the acquisition fits the company's One Lonza strategy and will strengthen its ability to support customers from innovation through to commercial supply.

The transaction also builds on Lonza's other US investments, including its ongoing work at Vacaville, California, and its announced investment in a commercial spray-drying facility in Bend, Oregon. [1]

Financial contribution expected from 2028

Lonza expects the acquired sites to generate approximately CHF 250 million in sales during full-year 2028.

However, the company also indicated that the acquired business will initially operate at a CORE EBITDA margin below Lonza's group level. Its expected contribution to the group's overall financial performance in 2028 is described as insignificant.

Lonza expects the acquired operations to benefit from integration into its CDMO-focused business model, use of available manufacturing capacity and additional expansion space. The company anticipates that the business could reach peak sales at Lonza's future group margin level by the middle of the 2030s.

These figures are company projections rather than guaranteed outcomes. Future performance will depend on customer demand, manufacturing utilisation, integration costs and additional investment requirements. [1]

Merck narrows its Life Science portfolio

For Merck KGaA, the agreement represents a strategic decision to divest its CDMO business and concentrate its Life Science portfolio on other products, technologies and services.

The company said the move supports its broader strategy of focusing investment on innovation-driven businesses and areas where its scientific capabilities can provide long-term value.

Merck's Life Science business supplies products and services used by pharmaceutical, biotechnology and CDMO customers across research, development and manufacturing.

Importantly, the agreement does not mean Merck is exiting the broader life sciences market or pharmaceutical manufacturing supply chain.

Its BioReliance Contract Testing Services business is excluded from the transaction and will remain part of Merck's Life Science portfolio. Merck will also continue supplying customers, including Lonza, with consumables, technologies and services used in biopharmaceutical development and manufacturing. [2]

Approximately 1,100 employees will join Lonza

The transaction includes around 1,100 employees working across the five acquired sites.

Once completed, Lonza expects its US workforce to exceed 6,000 employees. The transfer will add experienced scientific, technical and manufacturing personnel alongside the facilities and associated businesses.

Both companies said they would work together during the transition to support employees, customers and ongoing manufacturing operations.

Continuity is particularly important in pharmaceutical manufacturing because production programmes are subject to strict quality requirements, regulatory controls and customer commitments. Any interruption can affect clinical development schedules and commercial supply.

Until the transaction closes, the sites will remain under Merck's ownership and continue operating within its Life Science business.

What the acquisition means for the CDMO industry

The agreement highlights the importance of specialised manufacturing capabilities in the pharmaceutical industry.

As companies develop more complex medicines, access to facilities capable of producing bioconjugates, viral vectors and advanced drug-delivery products becomes increasingly important.

For Lonza, the acquisition adds established US infrastructure and specialised expertise to its existing network. For Merck, the sale allows it to concentrate its portfolio while transferring the CDMO operations to a company focused on contract manufacturing.

The transaction also reflects a broader business model in which pharmaceutical companies increasingly use specialised external manufacturers rather than building every production capability internally.

The deal's actual impact will become clearer after regulatory approvals, completion of the ownership transfer and integration of the acquired sites. For now, the agreement represents a significant expansion of Lonza's US manufacturing presence and a strategic change in the ownership of five specialised pharmaceutical production facilities.

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