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Deal is boosted by a $275-million investment from Blackstone Group
On the heels of what would normally be considered a major acquisition by a relatively small company—Cryoport’s purchase of Paris-based CryoPDP—the company is now leaping ahead with a new acquisition: the life sciences business, MVE Biological Solutions, of Chart Industries. The purchase price is $320 million, which Cryoport is swinging by combining its own cash and stock with the Blackstone investment. Pretty good for a company whose gross revenue in 2019 was $32 million.
When the dust settles on the Cryoport/CryoPDP/MVE combination, the expected revenue run rate will be $160 million, making Cryoport a combination of a major logistics provider to the regenerative medicine market (which includes the fast-growing cellular and genetic therapies [CGTs] field) as well as a supplier of the freezers, refrigerators, dewars and related equipment used in life sciences labs and factories where cryogenic conditions are maintained.
“This marks an exciting time in our growth as we become a larger and more comprehensive global player in supporting the fast growing cell and gene therapy industry and the life sciences industry, at large, with the most advanced and reliable temperature-controlled supply chain solutions in the world,” said Jerrell Shelton, Cryoport CEO.
Cryoport’s background information announcing the deal mentions an estimated 32% CAGR in the number of patients treated by CGTs annually over the next several years, which it then estimates translates into a $1.2-billion “addressable market for cryogenic shipping” by 2027. This is certainly possible; however, the CGT field is still finding its way commercially, with significant payer obstacles to $1-million+ per-patient treatments. A more technological factor is whether the current phase of mostly autologous therapies (which depend on cells from the patient being treated) will be supplanted by allogeneic therapies (using cells for any patient). The former involves a complex process of extracting, manipulating and returning cells for patient infusion; the latter involves “off the shelf” therapy, much as most biologics are administered to patients today. That distinction, in turn, affects the complexity of the supply chain.
In the meantime, Cryoport can keep busy supporting the 1,000+ CGT and tissue engineering trials going on globally (the company is also the preferred logistics provider for several already-commercial CGTs). It has also been bringing along business in refrigerated (2-8°C) biologics logistics, which Pharmaceutical Commerce, in its 2020 Cold Chain Sourcebook, estimates at $17.2 billion currently.