SSB results tell tale of two continents

By Nick Taylor

- Last updated on GMT

Related tags: Immune system, Revenue, Vaccine

Bioprocessing specialist Sartorius Stedim Biotech’s (SSB) net profit for the first half of 2008 rose by 3.5 per cent in comparison with last year, although the company continues to face difficulties in North America.

The weakness of the US biotech market was cited as the reason behind a 14.2 per cent fall in sales in the region, which dragged down the company’s overall results.

Growth of 12.7 per cent was recorded in Europe, by far SSB’s biggest market, fueled by the merger of Sartorius Biotech and Stedim and the booming vaccine industry.

Dr Joachim Kreuzburg, Sartorius’ CEO, said: "Our strong growth in Europe shows that following successful integration, Sartorius Stedim Biotech has positioned itself very well in the market​.

"In the USA, we were not immune to the effects elicited by the temporary weakness of the biotech markets, but we handled this challenge very well. By achieving a double-digit EBITA margin, we are continuing to perform at a very solid earnings level​."

The decline in the US is attributed to a number of SSB’s major US biotech accounts reducing their demand or postponing orders. Declining demand in the US was evident from SSB’s 2007 regional sales, which saw no growth.

Tellingly this was attributed to poor performance in the second half of the year and it appears that this has been carried into 2008.

Fortunately for SSB the situation across the Atlantic is considerably rosier, with the company flourishing in the European market. There was also a 2.3 per cent rise in sales revenue in Asian markets, although the rest of the world declined by 6.3 per cent.

Although the company expect global sales to pick up in the second half of the year it still believes it will fall short of its full-year targets.

A bright future?

SSB appears to be well placed to capitalise on the rising prominence of biologics in big pharma’s pipelines and the funding that is being ploughed into vaccines.

The company cited vaccines in particular as playing a key role in its sales growth in the European market and it seems a fairly safe bet that the field will continue to be fruitful.

Some big players in the industry have been looking recently to expand their vaccine operations, with Sanofi-Aventis launching a $6.5bn battle plan, Merck & Co investing $300m in a plant and GlaxoSmithKline’s new strategic direction highlighting the sector as key.

Related topics: Markets & Regulations

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