Lonza's Biologics Business Drives Growth, Fueled by Vacaville Acquisition

Swiss contract development and manufacturing organization (CDMO) Lonza has reported continued growth in the third quarter of 2025, with its recently acquired Vacaville, California biologics site playing a pivotal role in the company's sales rebound. The firm's strategic moves and market positioning have set the stage for a strong second half of the year, as it continues to navigate the post-COVID pharmaceutical landscape.

Vacaville Acquisition Boosts Biologics Segment

Lonza's Integrated Biologics unit has shown "strong momentum" in Q3, driven largely by the performance of its Vacaville facility. Acquired from Roche in a $1.2 billion deal last year, the site has quickly become a cornerstone of Lonza's biologics manufacturing capabilities. The company has highlighted "continuing robust demand for large-scale mammalian assets" and noted that the Vacaville site's integration is progressing according to plan.

The California facility, one of the world's largest biologics manufacturing sites with over 750 staff, has already secured a "significant long-term commercial supply agreement" in Q3. Lonza plans to invest further in the site over the next two to three years, focusing on upgrading automation systems and enhancing multi-purpose capabilities.

Financial Outlook and Growth Projections

Lonza has reiterated its annual revenue guidance, projecting growth between 20% and 21% for the full year 2025. The company expects sales in the second half of the year to outpace those from the first half, indicating accelerating momentum. While detailed financial figures were not disclosed in the qualitative update, Lonza's confidence in its growth trajectory is evident.

The Vacaville site is anticipated to contribute approximately 500 million Swiss francs in sales this year, underscoring its significance to Lonza's overall performance. This comes after the company reported a 19% sales growth at constant currencies to 3.6 billion Swiss francs in the first half of 2025.

Strategic Moves and Market Adaptation

In addition to its biologics success, Lonza reported that its Capsules & Health Ingredients (CHI) unit has returned to growth in Q3, supported by increased volumes. The company's ability to manufacture CHI products in the U.S. has proven advantageous, particularly as customers navigate the "evolving U.S. tariff environment."

Lonza maintains that it expects "no material financial impact" from currently announced U.S. trade policies, citing its diversified global footprint and substantial U.S. manufacturing capacity as key factors in supporting customer requirements.

The CDMO is also progressing with plans to divest its CHI business, stating that it has "made good progress with the necessary internal carve-out measures" in preparation for an exit "at the appropriate time."

As Lonza continues to execute its turnaround strategy under new leadership, these latest developments signal a positive trajectory for the company as it seeks to solidify its position in the competitive CDMO market and move beyond the challenges posed by the waning COVID-19 pandemic.