Patheon posts Q1 loss, but upbeat on 2010; Orexigen deal
For the quarter ended January 31, the contract manufacturing organisation (CMO) reported an operating loss of $6.6m (€4.8m), down from operating income of $3.9m for the year earlier period.
The firm said the reversal was due to both expenses related to the special committee set up to consider the JLL takeover bid and charges associated with the planned closure of its manufacturing facility in Caguas, Puerto Rico.
On a more positive note, Patheon’s total revenues for the quarter were $154.8m, up 5.2 per cent on the equivalent period in fiscal 2009.
However, this improvement was largely due to gains made by the firm’s commercial manufacturing business, revenue from which increased 8.8 per cent to $128m.
Revenue from product development services (PDS), the CMO’s other core business area, was down, falling 9.5 per cent to $26.7m on what CEO Wes Wheeler described as “soft market demand.”
Wheeler suggested: “New commercial business has been slow in coming due primarily to pending post-merger decision making at large pharmaceutical companies,“ and added that the performance was “consistent with the rest of the industry.”
Lower demand for product development fits with trends reported by other pharmaceutical outsourcing industries, notably the contract research sector which has consistently reported a slow down in early development projects.
Post M&A vogue for “substantial” contractors
However, even despite the decline in PDS demand during the closing months of 2009 Wheeler was upbeat about the coming year.
He said: “Since the beginning of calendar 2010, we have seen an encouraging increase in new sales activity as improved funding has become available for development stage companies.
“We have also begun active discussions in connection with the pending rationalization programs which will flow from the 2009 pharmaceutical industry merger activity.”
Wheeler also suggested there is an increasing trend for pharma firms to work with a small number of big outsourcing providers, citing a recent deal with Sanofi Aventis and “ongoing discussions” as evidence for his contention.
Orexigen contract
In other news, Patheon will make Orexigen Therapeutics’ weight management drug candidate Contrave as well as any formulations that are subsequently developed under a long-term contract signed last week.
San Diego, US-based developer Orexigen plans to file the product, a sustained release combination of naltrexone HCL and bupropion HCL, with the Food and Drug Administration later this year.
CEO Mike Narachi said: "Patheon's manufacturing capabilities provide us a proven platform to help ensure successful market entry and stable commercial supply of Contrave in the event it is approved."
