SGS to open 2nd Indian lab on schedule; 2011 revs grow despite ‘tough’ European market

By Gareth Macdonald

- Last updated on GMT

SGS to open 2nd Indian lab on schedule; 2011 revs grow despite ‘tough’ European market

Related tags: Generic drug

SGS’ new analytical lab in Mumbai, India will open later this week just six months after the analytical services firm began its construction.

The 15,000 sqft lab – SGS’ second in the country and 18th worldwide – houses 10,600sqft of space for product stability testing, a Q-TOF Quadrupole mass spec for extractables and leachables analysis as well as capabilities for microbiological sampling.

SGS said the investment was motived by growing demand from both local companies and multinationals for the analysis of innovative and generic drug products and added that the decision to set up the facility has already generated business.

As a result of its initiative to open the new facility, SGS recently entered into a preferred partnership with one such multinational pharmaceutical firm with a Mumbai subsidiary​.” Specifics of the deal were not disclosed.

SGS said it also plans to develop mycoplasma and endotoxin testing capabilities for biopharmaceuticals at the site – which fits with its previously stated aim​ of becoming a leader in biodrug testing by 2014.

Company executive VP Anne Hays said: “This new laboratory demonstrates SGS’ commitment to serve the growing demand in the Indian market and to support the development of the top western pharma companies that have operations in Mumbai​.”

Rev growth in 2011 despite ‘tough’ European market

The opening in Mumbai will come just a few days after SGS posted a pretty decent set of annual results – with profits climbing 4.9 per cent to SFr534m ($562m) in 2011. Revenue for the year increased 13.7 per cent to SFr4.8bn.

Of this life science services contributed SFr192m, up just under 12 per cent on last year driven, according to SGS, by laboratory activities which now generate around half of the divisions earnings.

SGS said: “Overall margins for the laboratories have remained stable, with good profitability improvements in the UK, USA, India and Singapore​.”

However, in Western Europe the story was different. SGS described the market for bioanalysis services as ‘tougher’ as a result of overcapacity.

It added that: “Startup costs were also incurred during the period to expand our services into new activities such as immuno-analysis and biomarkers​.”

SGS’ clinical research business also has a tough time of it in 2011 with continued weak demand for its early-phase services business as a result of delay investments by customers. Late-phase activity - in contrast - increased.

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