From The Editor | February 13, 2024

CDMO Carve Out Specialists


By Louis Garguilo, Chief Editor, Outsourced Pharma


How do investors influence our biopharma outsourcing ecosystem?

I asked one. But not just any investor. I spoke to a CDMO “carve out” specialist. Shailesh Maingi has been founding and funding, managing and mixing biotechs and CDMOs for decades.

And he’s done it again.

This time, it begins with his founding a cell-and-gene therapy (CGT) biotech that acquires and integrates a contract manufacturing facility, then two short years later spins the facility out again as a CDMO.

I’m interested in how this works to the benefit of the parties involved.

“Let’s discuss the investment thesis behind all this,” Maingi says. “We have a certain perspective.”

That perspective, and his industry gyrations, provide us a window into how investors, sponsors, and CDMOs come together ... and come apart to affect our outsourcing ecosystem

The Carving Conductors

My investigation into investors begins with details provided in our earlier series on Inceptor Bio, Maingi’s CGT start-up mentioned above.

His investment firm, Kineticos Ventures, is a private enterprise that funded (initial investment: $36 million) Inceptor’s carve out of its formerly integrated manufacturing facility. That CDMO is now called Kincell Bio.

Maingi’s career began as a research and development scientist at Roche. He moved to Sigma Aldridge “on the life sciences consumables and tools side.” In 2007, he met Frank Lis, when they both worked at Cardinal Health. Lis was instrumental in Cardinal’s spinning out of Catalent in 2007.

That same year, after witnessing the Catalent launch, Maingi formed Kineticos. Now some 16 years later, he’s partnered with Lis at Kineticos

“I’ve met so many interesting people along the way,” says Maingi. “We form an ecosystem.” An investor world, it seems, similar to our drug development and manufacturing one, where people and relationships matter.

Maingi also mentions Mark Bamforth, “an icon in our industry.”

Bamforth was founder/CEO, and led a spin out out from J&J (St. Louis) that became the CDMO Gallus Biopharmaceuticals (acquired by DPX Holdings; now a part of Patheon (Thermo Fisher)).

Maingi also learned from  Derek Hennecke who started and sold Xcelience, a Florida based CDMO, to Lonza.”

Lastly, Maingi mentions George Fotiades who formed Cardinal Health PTS, which was eventually carved out to Catalent. Fotiades was the first chairman for Catalent in 2007.

“Don’t get me wrong,” says Maingi, “carve outs are hard.”

“I learned second hand. Frank, Derek, George and I have lots of experience in buying companies, and carving them out. We know the pitfalls for small molecules, large molecules, and now CGT companies.”

Which brings us to Maingi’s current investor’s thesis for that CGT space.


Maingi believes the CGT space fundamentally changes how medicine will be practiced. That’s the overriding tenet of his funding thesis today.

“We're in the early innings, although the technology has been around. It's going to be a 50-year run from here,” he says.

But what Lis, his colleague from the Cardinal-Catalent days and now general partner at Kineticos, helped Maingi realize earlier than others was that “infrastructure for cell and gene therapy is not in place.”

“You have some capacity for vector capability now, but for cell-therapy development and early-stage needs, capacity is extremely limited. That’s why we invest in the services side – to build up the entire architecture and infrastructure. We want to support the CGT industry’s growth.”

Moving Pieces

That’s a segue back to his founding of Inceptor Bio (also see here), in North Carolina in May of 2020, as a CGT company. In November of 2021, Inceptor acquired a contact manufacturing facility in Gainesville, Florida, from Arranta Bio.

“Why did we do that?” he says to me. “In cell therapy especially, the process and the product are so closely aligned we wanted to be able to control – analytical development, development and manufacturing – the entire process. If you don't, you don't have a product; you can't characterize it.”

Particularly, he adds, “Everybody talks about process development. Few talk about analytical development, which is critical. So we acquired and integrated into Inceptor the processing facility that could perform all that.”

However, two years later, Maingi says, although “a great team was in place at the facility, Inceptor was only utilizing a third to a half of capacity.”

Frankly, I’m incredulous at this point.

“Really?” I ask. “How could this savvy CEO/investor with extensive CGT-industry experience make the mistake of pouring resources into the purchase of a facility he could only partially utilize?”

The retort is calmly delivered.

“Fundamentally, we always had the idea we were going to use about half the facility.”

“We thought for the other half, we would follow the model of a company like Forge Biologics [Ajinomoto], Elevate, or a number of other pharma companies that partner their excess manufacturing capacity – like Novartis is doing with J&J for the drug Carvykti.

“We didn’t want to be a fee-for-service organization. We wanted to have value based/risk sharing relationships by delivering on manufacturing.”

However, Maingi says he ultimately decided against that model. “You can’t be afraid to pivot, especially when the external environment changes.”

“Being a biotech is hard, and so are these risk sharing relationships. If you try to do both in the same organizations, even though the underlying science and the processes are similar, there's different mentalities, different investor bases. People are looking for different things.

“So that hybrid model is something we explored, but realized for us it’s better to have a pure play. We decided to get our professionals into an area where there's so much unmet need. That's why we decided to carve the facility back out.

“It’s good for us, the industry, and patients.”

The Overview

What have we learned from this initial conversation with our representative investor?

  • There is a beneficial entanglement of biotech and CDMO creators and investors who are literally reconfiguring our outsourcing industry.
  • While we mostly focus on investments that directly flow to biotech start-ups, we should recognize there’s more investing/divesting – and frankly funding-driven intrigue – throughout the ecosystem.
  • Investors are not always (anonymous) backers from large financing/equity entities; they can be the same folks who found and pilot both our biotechs and CDMOs.

In short, carving out (and re-integrating) facilities and businesses appears to be an optimizing tool for the advancement of specific industry segments, such as cell and gene therapy.

More with Maingi to come.