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Grifols reaches across the Atlantic and shells out $450M in a pair of M&A deals


Plasma is the lifeblood of Grifols, serving as the raw material for the biological medicines that generate most of the company’s revenue. But the Barcelona-based firm has eyed expansion beyond plasma-derived products and its acquisition of GigaGen offers the company the opportunity to add antibody drugs to its pipeline.

Grifols said it paid $ 80 million to acquire the remaining shares of GigaGen that it did not own, representing about 56% of the South San Francisco-based startup. Grifols had acquired a 44% stake in 2017 for $ 35 million. That deal also began a research collaboration developing engineered antibody therapies derived from human B cells.

GigaGen develops its therapies by starting with blood samples from donors. The company’s technology, called Surge, uses those samples to build a library of antibodies, from which specific antibodies are chosen for their ability to address a pathogen. These therapies are polyclonal, meaning they’re comprised of multiple antibodies. The company adds that its antibodies are engineered to be more potent than plasma-derived therapies.

The biotech initially focused on developing treatments for immune deficiency, infectious diseases, and cancers that resist treatment by a type of immunotherapy called checkpoint inhibitors. As the pandemic spread last year, GigaGen turned its attention to developing antibody treatments for Covid-19. Lead GigaGen drug candidate GIGA-2050 is comprised of more than 12,000 antibodies from the blood of 16 “exceptional responders” to Covid infection.

Grifols and GigaGen say GIGA-2050 has strong binding activity against natural variants of the novel coronavirus, including the variants that have recently emerged in several different regions around the world. Grifols is acquiring its partner just as the Covid drug candidate is set to begin clinical testing. Grifols said the FDA has cleared the drug to begin a Phase 1 study to assess the safety and tolerability of a single dose. The clinical trial will enroll up to 18 patients hospitalized with confirmed cases of Covid infection.

The upcoming clinical trial could have implications beyond Covid-19. Grifols said the study will also demonstrate the safety of GigaGen’s proprietary platform technology for manufacturing its antibody drugs specific to infectious diseases. These drugs could be quickly developed for treating emerging pathogens.

Grifols makes its therapies by isolating and purifying proteins that come from plasma. Its portfolio does not currently include products made from engineered proteins, though its pipeline includes engineered versions of alpha-1 proteinase inhibitor (A1P1) and plasmin. A1P1 treats a rare form of emphysema while plasmin addresses blood-clotting disorders.

“The progress that GigaGen is making to boost the next generation of antibody drugs, including the world’s first recombinant immunoglobulin, will enhance Grifols’s innovation efforts, aiming disease management beyond plasma-derived therapies,” José Terencio, the company’s vice president of innovation, said in a prepared statement.

Grifols’s plasma-derived therapies come from the company’s bioscience division, which tallied more than €3.2 billion (about $ 3.8 billion) in revenue in 2020 through the third quarter, a 9.9% increase compared to the same period in the prior year. In the nine months ending Sept. 30, 2020, Grifols reported €4 billion (about $ 4.8 billion) in net revenue.

Growth of the bioscience division is supported by the addition of plasma donation centers. In its 2019 annual report, Grifols set a goal of having 370 plasma collection centers by 2024. A deal announced earlier this month moves the company closer to its target. Grifols paid $ 370 million to acquire 25 plasma donation centers from BPL Plasma. According to Grifols, those centers collected about 1 million liters of plasma in the last year.

The addition of the BPL centers brings Grifols’s total number of plasma centers to 344, of which 298 are based in the U.S. The expansion plan is expected to Grifols’s plasma supply by 30% in 2021, according to the company’s report of third quarter financial results. The company also said it plans to open between 15 and 20 new plasma centers this year. Those facilities include plasma centers in Egypt, stemming from an alliance signed with the Egyptian government last November.

Photo: Josep Lago/AFP, via Getty Images

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