The $10 billion Japanese company acquiring Forge Biologics Inc. was co-founded more than a century ago by the chemist who discovered the taste umami and invented MSG.
The leap from flavor bombs to seeking cures for rare genetic diseases isn't so far as it sounds.
Ajinomoto Company Inc. has agreed to acquire the Grove City biotech for $620 million. The all-cash deal is expected to close in December, pending regulatory approvals.
“This is the fastest way to accelerate Forge to that sort of value and reach,” said John Maslowski, Forge chief commercial officer. “Who’s the end winner here? My guess would be patients.”
The deal also reinforces Central Ohio’s role as a growing biotech hub as the industry grows worldwide, he said.
"It's a huge win for Columbus and the team at Forge – it's proof that what they built will carry on," said Molly Bonakdarpour, the Drive Capital LLC partner who led the firm's investment in Forge.
"It shows what can happen when companies are built here in places like Columbus where we have this institutional knowledge," she said. "I hope we see more and more of these."
The deal comes amid a downturn for VC investing as well as IPOs and other exits. Forge's revenue has grown consistently and it was on a path to profitability, Maslowski said.
“We weren’t out actively looking for a partner,” he said. “It was not out of necessity.”
After paying off debt, $554 million in equity goes to shareholders. The company raised $250 million in VC, but the relative stakes of investors and founders aren't disclosed.
Ajinomoto plans to invest in expansions at the Grove City facility.
Now with more than 300 employees, Maslowski said, Forge's goal remains to top 400 jobs.
Who is acquiring Forge?
Seasonings, soup mixes and other nutrition products make up 70% of sales for Tokyo-based Ajinomoto – but its healthcare division operates clean-room manufacturing of chemical and biological materials for pharmaceutical companies.
“They’re mostly worldwide known for their food products. They have a quite substantial (contract manufacturing) business on the biopharma side,” Maslowski said.
Healthcare is part of what Ajinomoto calls its "AminoScience" platform, according to its website. MSG, made through fermentation, is a salt of a sodium ion and the amino acid glutamate, the protein building block that triggers the savory taste known as umami.
And DNA, core to gene therapy, essentially is a code for a series of amino acids to make proteins.
Think of Johnson & Johnson, Maslowski said. The medical technology and pharmaceutical giant recently spun off its consumer brands like Band-Aid and Neutrogena into a public company, while the parent pursues biopharmaceuticals like Covid-19 vaccines.
"Ajinomoto Co. has identified gene therapy (contract development and manufacturing) as one of its priority next-generation strategic businesses, functioning as a stepping stone to growth in advanced (therapeutics)," the company said in a news release.
"(Uniting) with Forge’s technology development capabilities, we will open up new treatment options for rare disease patients, aiming to realize Ajinomoto Co.’s purpose of contributing to the well-being of all human beings, our society and our planet."
Acquiring an operator is faster than building it up from scratch, Maslowski said.
“They’re really trying to bolt on a new offering to their already bigger biopharma side,” he said. “They’re taking a very humanistic approach: medicine, food, health.”
Forge, which installed the largest bioreactors on the market in its facility, has the manufacturing capacity for commercial production, should one of its 40 clients win FDA approval. Ajinomoto brings worldwide commercialization infrastructure such as back office, sales, marketing and distribution, Maslowski said.
"They have a worldwide reach, and we were just dipping our toe into (outside the) U.S.," he said.
How did Forge start?
The startup was founded by veterans of both the gene therapy manufacturing division of Nationwide Children's Hospital and some of its gene therapy spinoffs, later joined by others in the industry. They started in January 2020 in Drive's office, working in stealth mode through the first wave of the pandemic, until raising the Series A round and launching as Forge that July.
"Forge had the conviction of what they were building and powered through that event," Bonakdarpour said. "The best thing about Forge is that they are extremely focused on the mission. ... The goal is to truly save lives; it's something you can really rally behind."
Forge licenses technology from the University of Pittsburgh for the first therapy it's developing for a fatal enzyme deficiency. Early clinical trials extend through the end of 2025.
Co-founder and CEO Timothy Miller was in Japan for the deal-signing and calls with analysts of the public company.
"I told Tim I'm going to miss our weekly chat," said Bonakdarpour, since a company's board dissolves once it's acquired.
"It's been such an important part of my journey as an investor," she said. "Now I'll have to find other reasons to give them a call and chat."
