Building a Billion-Dollar Biologics Business

Building a Billion-Dollar Biologics Business

When we invested in Paragon Bioservices, the company had a small manufacturing facility and a few scientists and engineers on staff. In just five years, NewSpring helped grow the company into a $1.2bn business with a 200K square-foot GMP (Good Manufacturing Practices) manufacturing facility capable of commercial-scale gene therapy production.

Why we invested

	Paragon’s expertise addressed a significant need in an attractive and growing market given the rising demand for biologics.
	Paragon had a strong brand and client base built largely through word-of-mouth with significant opportunities for future growth and client expansion.
	Paragon’s specialized facility had strong technical capabilities and the ability to deliver services in segments that weren’t being served by other U.S. firms.

Finding efficient scale

The key to growing Paragon was finding efficient scale and professionalizing the company while taking calculated risks. Here’s how we did it:

1. HIRED A TEAM BUILDER
Pre-deal, we negotiated to bring on Pete Buzy as COO and quickly promoted him to CEO to run operations, build out the second-tier management team, and scale the business.

2. TRANSFORMED THE BUSINESS MODEL
We shifted Paragon's focus to emerging gene therapy companies and their unmet need for contract manufacturers given insufficient manufacturing capacity in the market.

3. INVESTED IN GENE DELIVERY DRUGS/THERAPEUTICS
We took the calculated risk to be first movers in gene therapy, for which we felt the FDA was ready to give approvals.

4. CREATED EFFICIENCIES AND EXPANDED MANUFACTURING SPACE
We invested in technology and additional facilities to grow from an academic lab-like setting to a professionalized business.

A billion-dollar exit

AT INVESTMENT: <$20mm Revenue and EBITDA negative World-class scientists and strong concept 53K-square foot manufacturing facility, primarily producing early phase clinical trial material Revenues coming from broad sources and predominantly in-bound calls

AT EXIT: $200mm+ Revenue and 25%+ EBITDA margins World-class commercialized business 200K+ square foot GMP manufacturing facility capable of commercial-scale gene therapy production Strong sales team and partnerships with over 20 of the world's top pharmaceutical and biotechnology companies

About NewSpring Healthcare

NewSpring Healthcare invests in innovative companies in the lower-middle market that improve the delivery of healthcare or bend the cost curve through technology and human capital efficiencies.