Sigma-Aldrich, Applied Genetic in Gene Therapy Alliance - Analyst Blog

Sigma-Aldrich Corporation's SIAL business unit  – SAFC Commercial (“SAFC”) – and Applied Genetic Technologies Corporation AGTC have inked a deal, under which, SAFC will provide gene therapy manufacturing services to companies developing gene-based therapies. The companies did not disclose the financial terms of the deal.

AGTC's proprietary HAVE system enables the manufacturing of adeno-associated virus AAV vectors, which strategically fits into SAFC's portfolio of services and is also consistent with its quality and technical capabilities. Under the deal terms, the companies will jointly market HAVE manufacturing method with SAFC's cGMP manufacturing capabilities.

AAV vectors have a wide scope in treating a variety of genetic diseases but it was difficult to develop them in a cost efficient manner at clinics and commercially. However, ACTG's proprietary HAVE system has made it happen. By partnering with SAFC, AGTC will be able to make its AAV manufacturing platform available to academic and corporate organizations that pursue gene-based therapies.

SAFC has a considerable proficiency with AGTC's HAVE system and also delivers a high level of service to its contract manufacturing customers. SAFC will provide the customers with high-quality and timely cGMP manufacturing services.

Through this partnership, clients will also have access to bio-manufacturing testing services from BioReliance, which is the biologics and early-development services business of SAFC.

Revenues from SAFC Commercial – Sigma-Aldrich's custom manufacturing services business unit – went up 3% to $159 million in first-quarter 2014. Sales rose in the low single-digits organically in life science products business while life science services saw a double-digit rise on gains in biopharma services. However, SAFC Hitech sales declined in the low single-digits due to pricing pressure.

Sigma-Aldrich's significant investments in sales, marketing and R&D initiatives are generating demand for its products. The company tries to take advantage of country-specific opportunities by expanding its presence in high-growth emerging markets. It is actively expanding its foothold in the Asia-Pacific region, especially in the fast-growing emerging markets of India and China.

Sigma-Aldrich currently carries a Zacks Rank #4 (Sell).

Other companies in the specialty chemical space with favorable Zacks Rank include Minerals technologies Inc. MTX and International Flavors & Fragrances Inc. IFF. While Minerals technologies carries a Zacks Rank #1 (Strong Buy), International Flavors & Fragrances holds a Zacks Rank #2 (Buy).

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