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AMRI: discovery services demand still strong despite closing NY plant

By Dan Stanton , 17-Apr-2014
Last updated on 17-Apr-2014 at 12:52 GMT

AMRI says its long-term outlook remains positive with continued demand for its contract research services despite plans to shutter a Discovery and Development Services facility.

Albany Molecular Research announced yesterday it will cease operations at its Syracuse, New York research centre by the end of June 2014 as part of ongoing consolidation and realignment within its Discovery and Development Service network.

Whilst CEO William Marth said the decision reflected AMRI’s continued evolution and alignment of its operations, he added AMRI remained committed to its discovery and development services.

“We believe the long-term outlook for AMRI remains positive,” Marth told Outsourcing-Pharma.com. “Industry and economic indicators continue to support an increased demand for CRO services as evidenced by virtual Biotech creation and increased non-profit, government activity.”

Third site closed

News of the closure had been fore-warned by the firm in 2012, who at the time said it was reassessing its US operations in light of the loss of revenues from antihistamine drug Allegra’s patent in 2015.

The company had already ended its internal R&D programme and closed its discovery and chemistry services plant in Budapest, Hungary , but later in the year it announced a second site in Bothell, Washington would be shuttered with operations being shifted to Singapore.

For Syracuse, Marth told us plans were still being finalized but the activities at the site would be transferred – along with some of the plant’s 47 workers – to “a number of AMRI facilities, including Albany, New York, Cedarburg, Wisconsin [recently acquired for $41m ], Holywell, UK, and Hyderabad, India.”

No interruptions

The site offers services that include chemical process R&D, custom chemical synthesis and scale-up of pharmaceuticals intermediates and final products, but Marth added no current or future projects would be interrupted by the closure.

“The AMRI sales team will work with each customer individually to ensure that their project requirements and preferences continue to be met seamlessly,” he told us.

The company will take a one-time of between $5.75m and $6.5m in transition and workforce costs associated with the closure, with the action expected to generate annual run-rate savings of $1.5m.

For the full year 2013, AMRI reported revenue from its DDS sector as $77m ($56m), up 5% on the year prior.