Navigating the Financial Landscape: Merger

Earlier this year, the Norwegian biotech company Arxx Therapeutics merged with the Dutch pharma company Oxitope Pharma. The merger came about after Arxx Therapeutics pitched to the Dutch VC Forbion, and Forbion saw the synergies between Arxx and their portfolio company Oxitope Pharma, and the potential of combining them. This is according to Jonas Hallén, co-founder and Chief Medical Officer (CMO) at the new company, Calluna Pharma, and previously the co-founder and CMO of Arxx Therapeutics.

“At Arxx we recognized that joining forces would enhance our capabilities in developing innovative therapies for immunological diseases,” he says. “Beyond combining our assets and scientific expertise, the merger also provided access to a broader network of key opinion leaders with extensive experience, which is crucial as we advance our therapies into clinical trials and aim to achieve significant milestones over the next few years.”

Beyond combining our assets and scientific expertise, the merger also provided access to a broader network of key opinion leaders with extensive experience, which is crucial as we advance our therapies into clinical trials and aim to achieve significant milestones over the next few years.

Key factors for a successful merger

NLS asked Hallén what he believes are the key factors for a successful merger like this one.

“Key factors include building a unified team and organization with a clear focus on shared goals. It is essential to integrate the strengths and expertise of both companies while fostering a collaborative culture that aligns everyone with common objectives,” he says. “Additionally, establishing transparent communication, mutual respect, and a strong sense of purpose are crucial to ensuring that the merged entity operates seamlessly and effectively.”

When it comes to challenges, Hallén says that there are several factors that need to be considered to ensure seamless integration. “Merging two companies involves merging two distinct organizational structures, each with its own processes and cultures. Moreover, bringing together teams from different countries and backgrounds requires careful alignment to create a cohesive work environment. To overcome these challenges, we prioritized bringing the entire new team together from the start in a workshop setting. This approach allowed us to collaboratively define how we work and establish processes tailored to our new company. By engaging everyone in this process early on, we’ve been able to build a unified culture and ensure smooth integration across all levels.”

The merger followed a completed Series A round of EUR 75 million, led by the European investor Forbion, and included existing Arxx investors Sarsia, p53, and Investinor. The funding will last until late 2026 and will support the company’s pipeline in fibrotic and inflammatory diseases.

A strong player in the mid-size CDMO market

Early this year, Finnish Biologics CDMO Biovian and Spanish Biologics CDMO 3P Biopharmaceuticals announced their combination. Through this combination, the group 3PBIOVIAN will become one of the main independent European bio-CDMOs, with gross sales of more than EUR 75 million.

“By combining our strengths we can support clients in clinical and commercial manufacturing. In other words, together we are a strong player in the mid-size CDMO market,” says Antti Nieminen, former CEO of Biovian and new deputy CEO of 3PBIOVIAN. “Additionally, both companies had a common main shareholder, Keensight Capital, so it is strategically beneficial to develop a bigger CDMO player in the market instead of two individual smaller players.”

By combining our strengths we can support clients in clinical and commercial manufacturing. In other words, together we are a strong player in the mid-size CDMO market.

Complementary service offerings

The new company will encompass 500 professionals operating across manufacturing facilities of 15,800 square meters. 3PBIOVIAN will leverage its manufacturing sites in Pamplona-Noáin, Spain, and Turku, Finland, as well as its commercial office in Boston, USA to address customer needs.

“One of the main strategic drivers and also a key factor for a successful combination like ours is complementary service offerings and expertise. In our case, the Pamplona site focuses on recombinant proteins from both mammalian and microbial cells as well as cell therapies, while the Turku site is the spearhead for ATMP products such as viral vectors. The Turku site also provides services for microbial recombinant proteins and HQ (high quality) and GMP plasmid DNA, which can be used as a raw material for mRNA and viral vector manufacturing. It is advantageous to combine two financially stable and strong companies to capture an even larger market share together than what the individual companies could do alone,” explains Nieminen.

Naturally, when two companies with unique cultural backgrounds combine, the different approaches soon become evident in daily interactions, he adds. “Even though Spanish and Finnish cultures differ in certain regards, we have already proven that we work together successfully through strong communication. A mutual understanding of each site’s unique cultural nuances is a key factor in ensuring smooth collaboration. It has been encouraging to see that people are excited about the opportunity to share and leverage their know-how, expertise, and capacity across the sites,” he says.

“Additionally, as with any company combination, a clear and well-designed integration plan is essential. 3PBIOVIAN has already established this plan and is making significant progress in executing the priority topics,” he adds.

Capture new business opportunities

The combined group will offer end-to-end development and manufacturing services for all protein-expression systems and viral vectors, both for drug substances and drug products, from preclinical to clinical development and commercial phases. Keensight Capital will continue to help the new combined company to strengthen its position at a global level and ERES IV, advised by Elyan Partners, and Sodena will each continue as minority shareholders alongside Keensight, maintaining their investment in the Group.

“Our future goal is to increase our visibility in the US market, where there is a growing demand for high-quality biologics CDMO services. Through strategic partnerships and by enhancing our sales and marketing efforts, we are establishing a robust footprint that will enable us to capture new business opportunities in this key market,” says Nieminen.