November 29, 2023

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Business The Solution

US government to invest up to $75mn in new Croda factory

The US government is investing up to $75mn in London-listed Croda’s new factory to shore up domestic production of a crucial component of mRNA vaccines, after the company provided the lipid nanoparticles for the BioNTech/Pfizer Covid-19 shot.

Croda, a speciality chemical manufacturer, is also investing up to $58mn in the new site in Pennsylvania as it seeks to expand its US manufacturing capacity.

The US Biomedical Advanced Research and Development Authority, which is charged with preparing the country for health crises, and an arm of the US department of defence are teaming up to invest in the site, which will support initiatives to prepare for any future pandemic.

The Covid vaccines were the first approved jabs to be made with mRNA technology, which is faster and more adaptable than traditional vaccine production techniques. The vaccines rely on bubbles of fat known as lipid nanoparticles to deliver genetic codes that teach the immune system to recognise the virus.

Now, pharmaceutical companies including Sanofi and GlaxoSmithKline, as well as the Covid mRNA vaccine makers, are trialling other shots, such as annual influenza vaccines, using the technology. BioNTech and Moderna are among those investing in early-stage trials using mRNA in cancer treatments.

Daniele Piergentili, president of Croda’s life sciences arm, said the technology “offers significant potential for the safe and efficient delivery of next-generation vaccines and therapeutic drugs”. 

“As a result of this investment, Croda will be able to expand its capabilities to develop and manufacture ingredients in support of this important technology. This will help ensure that the US is well prepared for future health emergencies and equipped to offer advanced treatments for some of the most prevalent illnesses in the world today,” he said.

Croda entered into the production of lipid nanoparticles during the pandemic through its acquisition of US group Avanti Polar Lipids and then significantly scaled up production.

In the financial year 2021-2022, Croda reported about $200mn of sales of lipids, fuelling growth in its life sciences division of 46 per cent. At the release of its annual earnings, Croda predicted similar revenue from lipids this year.

The global lipid market is expected to expand at a compound annual growth rate of almost 9 per cent between now and 2028, according to forecasts from Grand View Research.

The Pennsylvania factory will be Croda’s third mRNA facility, adding to an existing plant in Alabama, acquired in the Avanti deal, and another in the English town of Leek, in which the UK government is investing £15.9mn.