The improved performance was attributed to several new projects that began in Q3. Looking ahead to Q4 the company expects its “very robust” project pipeline will ensure that the upward trend continues.
Earlier in the year AmerisourceBergen’s packaging group’s financials had been hurt by delays in the approval of certain client’s drugs by the US Food and Drug Administration (FDA).
This “logjam of product approvals” is now beginning to break, according to Dave Yost, CEO of AmerisourceBergen, and consequently the outlook is more positive in the latest financials.
Despite the earlier uncertainties surrounding approvals, AmerisourceBergen remained confident that pharmas would continue to increasingly outsource their packaging requirements.
This trend towards increased outsourcing has helped AmerisourceBergen’s business, of which packaging represents a small amount of total revenues.
Distribution business strong
AmerisourceBergen’s primary business is pharmaceutical distribution, which it divides into two units covering speciality products, such as biologics and oncology drugs, and other therapeutics.
The most dramatic growth was seen by the company’s generic distribution business, which posted a 20 per cent increase in revenues against the corresponding period of last year. Speciality product revenues grew by six per cent.
This helped the company’s operating income grow by 7.8 per cent to $213m (€149.3m). Net income in Q3 2008 was affected by costs related to the sale of the company’s worker’s compensation business and consequently a $108m loss last year was turned into a $118.8m profit in the latest financials.
Looking ahead AmerisourceBergen noted that uncertainty still surrounds the details of healthcare reform in the US. The eventual legislation will likely have an effect on the company’s operations but Yost is optimistic.
He commented that he believes “that increased pharmaceutical utilisation will be a key element of any healthcare reform” and that this will be a boost for the business. Furthermore, Yost believes the increased emphasis on generics and biosimilars will help AmerisourceBergen.