West’s Q2 sales and profits climb
Revenue for the period reached just over $279m (€181m), up around 6 per cent on the year earlier quarter and ahead of Wall Street’s consensus estimate $273m.
West’s pharmaceutical systems segment generated sales of $213m, despite a $6m decline in the sale of components used in the packaging of erythropoiesis stimulating agents (ESAs) and a $4m drop in turnover generated by a diagnostic product that the firm discontinued in late 2007.
These declines were more than offset by sales of West standard pharmaceutical packaging components, flip off drug seals and safety administration systems, which were around $15m higher than last year.
The Pennsylvania-headquartered also recorded a $2.6m increase in revenue derived from its tooling, product development and laboratory services operations.
Donald Morel, West’s CEO, said that: "We have responded to increases in raw material and energy costs by working with our customers and vendors to maintain the stability of supply, by taking appropriate and fair pricing actions and by looking within our own operations for ways to manage other costs.“He added that: "Our customers continue to carefully manage their inventory levels in response to broad cost increases, and West is, in turn, sensitive to the effects of customer order patterns and higher costs on our own results."
Exubera hangover hits Tech group
The discontinuation of Pfizer’s inhalable diabetes treatment Exubera (insulin human [rDNA origin) once again hurt West’s Tech services group. The division, which was responsible for the manufacture of the product’s delivery device, generated turnover of $70m, down $8m on those posted last year.
West explained that it had received the final payment from its agreement with Pfizer’s co-developer Nektar Therapeutics, which represented reimbursement for the closure and ongoing conversion of its Michigan Exubera device production facility.
The division’s income was also impacted by the loss of packaging sales related to an over-the counter diet product that had contributed $4m in the comparable quarter last year.
On a more positive note, the contribution from West’s contract manufacturing operations grew around $4m as a result of increased demand for intravenous and blood filter products manufactured at its Michigan and Puerto Rico facilities. In addition, the firm’s insulin pen and intra-nasal delivery device businesses experienced considerable growth.
For the full year, West expects to achieve sales of $1.08bn, which pharmaceutical systems and Tech group operations generating $825m to $835m and $260 to $270m, respectively.