National Resilience Announces Major Consolidation, Closing 6 of 10 Plants

National Resilience, a contract development and manufacturing organization (CDMO) established in 2020, has announced a significant restructuring of its operations. The company will close six of its ten manufacturing plants and continue as a streamlined CDMO, focusing on high-growth segments in cell-based medicines, biologics, and aseptic drug product operations.

Consolidation and Facility Closures

CEO William Marth revealed the consolidation plans in a letter to customers, citing underutilized facilities as the primary reason for the closures. The affected sites include:

• Three facilities in Massachusetts
• Two in California (San Diego and Fremont)
• One in Alachua, Florida

The company will maintain operations at four sites:

• Cincinnati, Ohio (anchor facility)
• Toronto, Canada
• Philadelphia, Pennsylvania
• Research Triangle Park, North Carolina

The plant closures are being executed through a legal procedure initiated by a "leaseholder affiliate," with the bankruptcy applying only to the six closed sites.

Financial Restructuring and Future Plans

To support the consolidation efforts, National Resilience has secured $250 million in bridge financing from a group of investors. The company is also seeking additional debt financing to fuel future growth plans.

"It has become clear that our capacity expansion has outpaced industry demand," Marth stated in his letter. He added that the company will continue with a "streamlined footprint" and focus on "high-growth segments to advance cell-based medicines, primarily biologics, and aseptic drug product operations."

Industry Context and Company History

National Resilience launched in November 2020 with an $800 million investment and ambitious goals to become the "world's most advanced biopharmaceutical manufacturing ecosystem." The company rapidly expanded through acquisitions and partnerships, including:

• A $110 million deal with gene therapy specialist bluebird bio in 2021
• The acquisition of Ology Bioservices in 2021

Despite securing contracts with major pharmaceutical companies like Takeda and AstraZeneca, and receiving a $410 million loan from the Department of Defense in 2023, Resilience has struggled to meet its initial objectives. The company and its investors appear to have misjudged the trajectory of the biotech and CDMO industries.

Recent challenges for Resilience included leadership changes, with Rahul Singhvi stepping down as CEO in December 2023, replaced by industry veteran William Marth. The company also implemented significant layoffs, including 105 roles at its Florida site in December 2023 and 120 positions at its North Carolina facility in January 2024.

As National Resilience moves forward with its restructured operations, the company aims to leverage its expertise in producing high-demand products, such as obesity and diabetes drugs for an unnamed client, while adapting to evolving market conditions in the pharmaceutical manufacturing sector.