AMRI posts small Q1 loss but sees strong growth of manufacturing biz
The New York, US-based development services provider and manufacturer reported a loss of $1.5m (€1m) for the three months ended March 31, down from the $600,000 profit it reported in the comparable period last year.
AMRI attributed the deficit to costs with past problems at its plant in Burlington, Massachusetts, which resumed production in March under new hire Peter Hansbury, and charges connected to restructuring.
CFO Mark Frost told in-Pharmatechnologist.com that: “We are addressing the key cost issues that led to the net loss which are overcapacity in US Discovery Services and closing out the outstanding FDA issue in Burlington."
Demand for development and RFP
AMRI’s contracting revenue grew strongly in the period, climbing 10 per cent to $43m on the contributions from its small and large-scale manufacturing businesses, which increased 24 per cent and 22 per cent respectively.
Frost said the gains were driven by interesting market dynamics, explaining that: “We are seeing two encouraging trends driving the growth of our development, small-scale and large scale manufacturing business.
“The first one is Specialty Pharma/Biotech's are moving forward additional late stage phase II and III programs.
“The other macro point is the dismantling by pharma of their R&D organizations which is leading to increased outsourcing of their activities. We are now seeing RFP's from large pharma in the Development space where this business was always completed in-house in the past."
Additional revenue growth came in the form of higher royalties from sale of the non sedating antihistamine Allegra. The drug, which is sold as Telfast outside the US, contributed $14m in the period, up 34 per cent on last year.
Discovery revs fall
The one part of AMRI’s business that did not see growth in the three months to March 31 was discovery services, which saw revenue fall some 15 per cent to $10.6m.
However, according to CEO Tom D'Ambra, while demand for discovery services has shifted away from the US to countries where research can be conducted at lower cost, the trend provides AMRI with opportunities.
He told in-Pharmatechnologist.com that: “The positive for us is that demand for discovery services at our Asian locations continues to grow steadily. To meet that demand, we have been moving ahead with capacity expansion in Singapore and Hyderabad.
Also, as stated above, AMRI recently merged its R&D and discovery chemistry units. D’Ambra explained that the move was part of a plan to improve efficiency and communication across multiple departments.
“We believe this combining of all of our discovery capabilities in biology and discovery chemistry into one organization will further enhance AMRI's ability to generate significant value for customers and stakeholders."
