Genmab to buy antibody manufacturing plant for $240M

Genmab A/S and PDL BioPharma, Inc. announced on February 21 that they have entered into an agreement under which Genmab would acquire PDL's antibody manufacturing facility located in Brooklyn Park, Minnesota, USA for USD 240 million to be paid in cash. The transaction also includes land, equipment and access to a leased space housing a development lab.

Genmab expects the Minnesota facility, which has a production capacity of 22,000 liters, will be sufficient to provide a sustainable source of both clinical and commercial scale material for its pipeline. The facility features two 1,000 liter and two 10,000 liter bioreactors, which support the simultaneous manufacture of multiple antibody products and will enable Genmab to transition three antibodies from research to manufacturing per year.

"Over the past few years Genmab has been preparing for the market launch of our late stage antibodies and we continue to build a broad pipeline of antibody products, which currently includes 10 products in clinical development. Consequently, the need to secure significant manufacturing capacity has become an increasing priority," stated Lisa N. Drakeman, Ph.D., chief executive officer of Genmab. "We believe that the new PDL manufacturing facility, with its complete antibody process development platform, represents our best option to secure manufacturing capacity, allowing Genmab to produce antibodies more efficiently and cost effectively while adding key manufacturing expertise to our capabilities we continue to build for a commercial future."

"We are pleased to enter into this agreement with Genmab, which we believe is the optimal transaction to fully realize the value of our biologics manufacturing facility. Importantly, it also represents another step in delivering on our commitment to maximize the value of PDL's assets for our stockholders, following on the recent sale of our commercial assets," said L. Patrick Gage, Ph.D., interim chief executive officer of PDL.

Genmab plans to retain the approximately 170 employees currently working at the manufacturing facility and does not foresee reducing either the PDL BioPharma or Genmab headcount following the acquisition. In connection with this transaction, Genmab would produce clinical material to supply PDL's investigational studies for certain of its pipeline products under a clinical supply agreement.

Genmab's Torben Lund-Hansen, Ph.D. will serve as president of the manufacturing facility. Dr. Lund-Hansen has served as vice president, head of Manufacturing at Genmab since 2002. Previously, Dr. Lund-Hansen was responsible for establishing manufacturing facilities for Novo Nordisk.

The transaction has been approved by the boards of directors of both companies and is expected to close by the end of the first quarter of 2008. The transaction is subject to customary closing conditions, including clearance by the US antitrust authorities under the Hart-Scott-Rodino Act and will become effective as soon as these conditions have been satisfied.

Merrill Lynch & Co. is acting as financial advisor and DLA Piper and Briggs and Morgan, P.A. are acting as legal advisors to PDL in connection with the transaction.