The U.S. life sciences industry is a key driver of economic growth and domestic manufacturing. American pharmaceutical manufacturers employ an estimated 291,000 employees, and for every one job in the pharmaceutical industry, four jobs are created in supporting industries. The strength of America’s pharmaceutical manufacturing is fueled, in part, by life sciences mergers and acquisitions (M&A).
It is often inefficient or prohibitively expensive for early-stage companies to build the significant, complex infrastructure needed to manufacture treatments and cures at scale — particularly as 80 percent of life sciences companies operate without a profit.
That’s why M&A is critical. It allows life sciences companies of all sizes to focus on what they do best, and then engage in a merger or acquisition to couple a new innovation with the manufacturing capabilities needed to bring it to patients. This symbiotic relationship is a key driver of investment in new life sciences start-ups as well as continued investment in domestic manufacturing.
One such example is Neogene Therapeutics’ acquisition by AstraZeneca. Neogene was founded in 2018 by cell therapy experts Dr. Ton Schumacher and Dr. Carsten Linneman, and quickly developed a promising pipeline of targeted, T-cell receptor therapies for a variety of cancers. Although Neogene had developed the infrastructure to manufacture initial doses of these investigational therapies, the small company needed to partner with a more established company to be able to manufacture their therapies at scale.
“Bringing Neogene into our Company brings leading infrastructure to the development of this revolutionary new approach in cell therapy. Our complementary skills will help us to overcome practical barriers and reach patients with hard-to-treat cancers in the clinic.” – Gavin Bendle, SVP Research and Development, Neogene & Eric Tran, Associate Member, Earle A. Chiles Research Institute, Providence Cancer Institute; Expert Consultant, AstraZeneca (2023)
Neogene was acquired by AstraZeneca in 2022, combining Neogene’s promising science and initial manufacturing capabilities with AstraZeneca’s resources and expertise in manufacturing medicines at scale. Following this acquisition, AstraZeneca has continued to invest in building its American manufacturing infrastructure — including a recent $300 million investment in a new Maryland-based facility that will help scale Neogene’s promising pipeline of cell therapies.
“We are incredibly excited that more than 150 new highly skilled jobs are being created to bring our scientific work and therapies to clinical trials which could transform the lives of patients around the world. This new $300 million investment will accelerate our ambition to make next-generation cell therapy a reality, ensuring that we are ready to scale and meet the demands of patients.” – Pam Cheng, Executive Vice President of Global Operations & IT and Chief Sustainability Officer, AstraZeneca (2024)
As this example highlights, M&A fuels domestic manufacturing by connecting promising innovations with the right resources and infrastructure, at the right time, to bring them to patients. As supporting America’s leadership in biopharmaceutical innovation has emerged as a growing focus for policymakers, competition policies must acknowledge this reality and support, rather than stifle, these pro-competitive partnerships.