Patheon op profit up 12%

By Nick Taylor

- Last updated on GMT

Related tags: Cent, United states dollar

Patheon has posted a 12 per cent growth in operating profit in the second quarter and said there is “strong evidence” the business environment is improving.

A turbulent economic climate and pharma-specific issues have impacted on most contract service providers in recent years. However, Patheon, buoyed by its operating income increasing to $15m (€12.3m), believes the market for contract pharma services is improving.

We are beginning to see stronger sales activity for our pharmaceutical development services (PDS) business, and significantly higher levels of quotation activity in the commercial side of the business​”, said Wes Wheeler, CEO of Patheon.

This upturn is underpinned by improvements in the economy, increased funding activity and progress with plant consolidations, said Wheeler. Last week Patheon become a preferred supplier to Merck & Co and is hoping to seal more of these deals as big pharma consolidates.

In the second quarter revenues from commercial manufacturing grew by 5.2 per cent to $142.2m. If local currencies had remained the same as last year growth would have been 1.6 per cent.

Europe drove growth, primarily because of the weak US dollar but accounting for this fact sales were still up 3.5 per cent. In contrast, lower Toronto, Canada sales meant that after accounting for the impact of favourable exchange rates North American revenues fell 0.4 per cent.

North America was also affected by unfavourable product mix and higher utility and maintenance costs in Puerto Rico. These factors were partially offset by the realisation of deferred revenue in Cincinnati, Ohio, US and favourable foreign exchange contracts in Canada.

PDS’ revenues increased by 3.1 per cent to $33.2m. However, had local currency rates remained constant, revenues would have fallen by one per cent year-on-year. Over the past six months revenues from PDS have fallen year-on-year by 2.9 per cent to $59.9m.

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