‘Part-time’ CMOs see businesses drop in downturn

By Phil Taylor

- Last updated on GMT

Related tags Contract manufacturing Pharmacology

Overcapacity in pharmaceutical manufacturing around the world means that smaller drugmakers sometimes set themselves up as contract manufacturers in order to provide an additional revenue stream and avoid standing plants idle.

As the economy starts to bite, OutsourcingPharma.com took a look at some of these ‘part-time’ CMOs to see how they are faring during the downturn, and found that in most cases the firm’s were feeling the pinch as 2008 drew to a close.

Enzon Pharmaceuticals

Biopharmaceutical company Enzon saw revenues from its contract manufacturing division fall to $4.9m in the last quarter of 2008, a 9 per cent decline on the same period a year earlier. Most of the firm’s revenues come from fill and finish services for injectable and inhalation therapy products.

For the full-year, however, contract revenue grew 34 per cent to $23.6m “due to an increase in technology transfer activities, certain one-time non-commercial services and manufacturing of products for third parties.” ​Total revenues at Enzon were $48.4m in the fourth quarter, and the company made a small ($500,000) net loss in the period.

Meda

Swedish specialty pharmaceutical company Meda AB said its contract manufacturing and service business – Germany and France-based Meda Manufacturing - saw revenues fall to SEK 85m €7.6m) in the fourth quarter from more than 90m a year earlier.

However, the firm said this was a consequence of a strategic move out of the contract manufacturing sector, which has been a weak performer for several quarters. Meda is increasingly using its manufacturing units to make its own products. Contract manufacturing sales were

Geopharma

US specialty pharmaceutical manufacturer Geopharma saw a dramatic decrease in contract manufacturing revenues in the the fiscal third quarter ended December 31, down more than 40 per cent to around $4m. Total revenues in the quarter were $13m, up 58 per cent on the back of good sales of Geopharma’s pharmaceutical products and distribution revenues.

Despite the downturn in the contract manufacturing business, Geopharma said “the addition of new manufacturing contracts and the emergence of our pharmaceutical business lend us confidence we will end the 2009 fiscal year on a high note​.”

Integrated Biopharma

US nutritional supplement and pharmaceutical manufacturer said its contract manufacturing business saw a $1.5m decline in revenues during the fourth quarter of 2008, which was mirrored by a similar decline in its active pharmaceutical ingredient (API) business.

Contract manufacturing sales fell as a result of “lower volume and selling prices to our major customer​,” said Integrated Biopharma.

Fresenius

Finally, Fresenius Kabi Pharmaceuticals saw a downturn in its contract manufacturing business - Fresenius Kabi Product Partnering - in 2008, with revenues down $2.1m to $13.5m over the course of the year. No explanation was given for the reduction.

Fresenius Kabi Product Partnering specialises in fill and finish of small- and large-volume sterile fluid solutions and emulsions.

Related topics Contract Manufacturing & Logistics

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