Cambrex Announces $120M Expansion Amid Potential Sale

Cambrex, a leading contract development and manufacturing organization (CDMO), has revealed plans for a significant expansion of its U.S. operations, investing $120 million to boost capacity at its Iowa facility. This move comes as the pharmaceutical industry continues to prioritize onshoring and amid reports of a potential sale of the company.

Expansion Details and Strategic Implications

Cambrex's investment will support a 40% increase in capacity at its Charles City, Iowa, facility, which is already touted as the largest independent API facility in the United States. Upon completion, the 45-acre site will boast an annual production capacity of nearly 1 million liters.

Thomas Loewald, Cambrex's chief executive, emphasized the strategic importance of this expansion, stating, "With rising demand for U.S.-based supply chains for critical therapies, Cambrex is focused on supporting the long-term stability of pharmaceutical manufacturing in the United States." Loewald also noted strong customer interest in partnering with Cambrex to utilize this expanded capacity.

The expansion aligns with the broader industry trend of increasing domestic pharmaceutical production, partly driven by the U.S. government's push for onshoring critical drug manufacturing capabilities.

Potential Sale and Market Dynamics

The expansion announcement follows a report by the Financial Times last month suggesting that Cambrex's owner, private equity firm Permira, is exploring a potential sale of the CDMO. The deal could reportedly value Cambrex at up to $4 billion, reflecting growing investor interest in the drug manufacturing sector.

Permira, which acquired Cambrex in a $2.4 billion deal in 2019, is said to be targeting private equity buyers and has reportedly reached out to about a dozen potential suitors. This development comes in the wake of other significant transactions in the CDMO space, including the recent $16.5 billion acquisition of Catalent by Novo Holdings.

The potential sale of Cambrex, coupled with its substantial expansion plans, underscores the dynamic nature of the pharmaceutical manufacturing landscape and the increasing value placed on U.S.-based production capabilities.