Novozymes Bid for Australian Biotech Company GroPep Ltd.

15/08/06 Novozymes has made an offer of DKK 375 million (AUD 83,6 million) for Australian biotech company GroPep Ltd. The acquisition will boost Novozymes’ work on building a platform in ingredients for the biopharmaceutical industry.

“It is a part of Novozymes strategy to leverage its biotech expertise and technology platform, in order to build new business areas within ingredients for the biopharmaceutical industry and this acquisition is an excellent opportunity to do exactly that,” says CEO of Novozymes Steen Riisgaard.

GroPep Ltd.’s chairman Richard England is also very positive about Novozymes’ offer: “The board of GroPep as well as the management are committed to move forward with the offer from Novozymes. Novozymes is a leading global bioindustrial manufacturer that will bring extensive management, research and marketing capabilities to enhance GroPep’s market access and boost development of our product portfolio.”

Novozymes has been strengthening its activities in recombinant ingredients for the biopharmaceutical industry. GroPep Ltd., which is based on the same technology platform as Novozymes, is a good strategic match, not only technologically but also purely commercially.

“We see the acquisition of GroPep as an opportunity to expand our offering to the market for ingredients for cell cultures,” says Steen Riisgaard. “The combination of our own projects within this area, our recent acquisition in the UK of Novozymes Delta and GroPep strengthens our position in order to become a leading supplier of recombinant ingredients for the biopharmaceutical market.”

One advantage of using recombinant proteins is that the biopharmaceutical industry can meet ever tougher consumer safety standards. Proteins of human or animal origin have traditionally been used in production rather than recombinant proteins. However, the use of human and animal proteins brings a risk of the transmission of disease. There is no such risk with recombinant proteins.

GroPep Ltd.’s biggest product, the growth factor Long-R3-IGF-1, is currently the only recombinant IGF-1 for cell culture ingredients on the market and accounts for the bulk of the company’s sales. GroPep Ltd. has 80 employees and is based in Adelaide in Australia. It develops, produces and markets biologically active proteins for cell culture ingredients and research. GroPep Ltd. is also active in the early stages of developing other biopharmaceutical products. Last year GroPep Ltd.'s total revenue amounted to AUD 16,7 million (DKK 75 million), and the company spends around 20% of revenue on research and development.