ZURICH, March 20 (Reuters) - Swiss contract drug

manufacturer Lonza said on Wednesday it has signed an

agreement to acquire the Genentech manufacturing facility in

Vacaville, California, from drugmaker Roche for $1.2

billion in cash.

Lonza plans to invest around 500 million Swiss francs

($562.3 million) to upgrade the facility and enhance

capabilities at the site to accommodate the next generation of

mammalian biologics therapies, the company said in a statement.

The Vacaville facility currently has a total bioreactor

capacity of around 330,000 liters, making it one of the largest

biologics manufacturing sites worldwide by volume, Lonza said.

"The Vacaville site is a highly valuable strategic

acquisition that will make capacity immediately available for

our customers and unlock future growth for our Biologics

division," Jean-Christophe Hyvert, president of Biologics at

Lonza, said in the statement.

The transaction is expected to close in the second half of

2024, subject to customary closing conditions.

Basel-based Lonza also raised its 2024-2028 sales target to

a range of 12%-15% compound annual growth rate, from its 11-13%

growth estimate previously.

Under the deal, the about 750 Genentech employees at the

facility will be offered employment by Lonza and the products

currently produced at the site by Roche will continue to be

supplied by Lonza for a transition period, Roche said.

Susanne Hundsbaek-Pedersen, global head of pharma technical

operations at Roche, said the sale of the facility was part of a

long-term network strategy and optimisation plan, to deliver a

"more diversified portfolio including new drug modalities."