AMRI posts Q4 loss on non-cash charges, but sees manufacturing rev gains

Strong demand for Asia-based chemistry services and global biology services were offset by weaker demand for US based medicinal chemistry services.

Revenues at the company’s Burlington facility were low due to the continuing resolution of problems at the plant detailed in a US Food and Drug Administration (FDA) warning letter dated August 17, 2010.

Investigators identified “significant violations” ​of the Current Good Manufacturing Practice (CGMP) including particulate contamination of syringes and vials and irregularities in the aseptic techniques for manufacturing and quality control.

Andrea Schulz, spokeswoman for AMRI, told Outsourcing-Pharma.com that: “Progress related to our remediation efforts concerning the FDA warning letter for Burlington continues according to schedule.”​

“We submitted an internal report of the FDA in the first half of November and a second internal report will be submitted later in February. If all goes according to plan, we expect to restart GMP production of customer projects in the near future.”​

Manufacturing gains​

Although the Burlington problems have had a significant impact on AMRI’s Q4 results, the 48 per cent increase in revenue for the firm's large-scale contract manufacturing business over the period is a reason for optimism according to Schulz.

“Growth in large scale manufacturing was driven primarily by demand for commercial API at our US facility” ​said Schulz, “trends we are experiencing that we believe are overall affecting demand for our pharmaceutical development and manufacturing services include an increase in funding in the biotech sector and the resulting increased demand for chemistry development and analytical support.”​

In contrast AMRI’s contract discovery services unit saw a 13 per cent drop in revenue to $11.1m in the final three months of 2010, largely as a result of lower demand in the North America.

However, rather than dwell on the low level of demand for chemistry services in North America, Schultz focused on the growth of the company’s discovery services business in other regions.

“On the positive side, demand for our discovery services at our Asian locations continued steady growth. As a result we continue to move ahead with capacity expansion to meet growing demand in Singapore and Hyderabad, India,”​ she said.