April 14, 2019 / 11:39 PM / 3 days ago

UPDATE 1-Catalent to buy Paragon Bioservices for $1.2 bln -WSJ

(Adds details from WSJ report, background on gene therapy, disclosures)

April 14 (Reuters) - Drug developer Catalent Inc has agreed to buy privately held, gene-therapy focused Paragon Bioservices Inc for $1.2 billion, the Wall Street Journal reported on Sunday, citing people familiar with the matter.

An all-cash deal between the companies is expected to be announced on Monday morning and would help Catalent expand its capabilities to develop specialized and costly gene therapy treatments, the Journal said here

Catalent and Paragon did not immediately respond to requests for comment on Sunday.

Drug companies have been moving aggressively into gene therapy, where treatments for rare, inherited diseases command some of the highest prices in medicine.

Paragon, backed by private-equity firms Camden Partners and NewSpring Capital, focuses on developing gene therapy, next-generation vaccines, and other complex biopharmaceuticals for its clients.

The Baltimore, Maryland-based company is expected to record more than $200 million in revenue this year, the Journal said.

Gene therapies use specially engineered viruses, or viral vectors, to deliver genetic material into defective cells, in hopes of improving or potentially even curing an inherited condition.

Somerset, New Jersey-based Catalent also develops drugs for other companies and does business in Asia, Europe, and North and South Americas.

Its biologics and specialty drug business generated about $602 million in revenue in the 2018 financial year.

If confirmed, the deal would follow other multi-billion-dollar deals involving gene therapy companies.

Swiss drugmaker Roche agreed to buy U.S.-based gene therapy specialist Spark Therapeutics Inc for $4.3 billion in February, while Novartis purchased U.S.-based Avexis for $8.7 billion last year, also to gain a platform of gene therapies. (Reporting by Ismail Shakil in Bengaluru Editing by Chris Reese)

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