Ransom looking for pharma manufacturing arm sale
Ransom said it is trying to find a buyer for its loss-making pharmaceutical contract manufacturing business, to allow it to concentrate on its consumer health products and natural extracts.
The contract manufacturing operation – which trades as Ransom Pharmaceuticals - suffered from low volumes during the first half of the year but was expected to recover on the back of new business in the pipeline, said Ransom’s recently-appointed CEO Ivor Harrison.
“However, the temporary suspension of the Manufacturers’ Licence by the Medicines and Healthcare products Regulatory Agency in December 2007 set back the anticipated recovery and led to substantial losses,” he continued.
The suspension was a result of the MHRA’s concern over aspects of cGMP manufacturing process and documentation, and led to a recall of products. After a further inspection in January, the Licence was reinstated, and the facilities have since passed two additional inspections in April and October.
Overall, Ransom reported an operating loss of £4.4m on sales of £35m (€37m). Ransom Pharmaceuticals’ contribution was £4.7m for the year, down from £5.7m in fiscal 2007, with £1.8m in lost revenue as a result of the suspension, said Harrison. However, he believes the unit has a bright future and is gaining a “significant level of new business.”
In particular, he said, the agreement with Forest Laboratories UK for the supply of infant colic treatment Infacol to the European market is expected to underpin an improvement in financial performance.
If a buyer for the division can be find, it stands to pick up newly-constructed manufacturing facilities with high speed automated packaging lines that can handle filling, capping and labelling of a wide range of bottle shapes and sizes.
The unit can also carry out powder, cream and gel manufacturing and has MHRA licensed segregated areas for specialist pharmaceutical liquids, manufacture and packaging.
Ransom is in discussions with Barclays with the new management team in a bid to maintain the bank’s financial support after the firm breached its banking covenants in June, making overdraft and loan facilities immediately repayable.
“There is a reasonable prospect that the company will be able to agree new banking facilities with its lending bank in the near future,” said Harrison.