Q1 results were largely positive for Patheon who announced revenue up 39% to $213.5m (€164m) on the same quarter last year.
Patheon acquired Banner Pharmacaps last year for $255m as part of a move into the softgel business and the drug delivery specialist attributed $23m to this quarter’s revenue. However, associated acquisition costs and related refinancing meant Patheon’s loss from continuing operations stood at $51.4m compared to a loss of $19.3m last year.
Speaking with this publication, Patheon spokesperson Jennifer Almond said: “All four of the Banner sites have been transitioned to our commercial manufacturing operations business structure” as part of the ongoing integration.
Banner has manufacturing facilities in the US, Mexico, the Netherlands and Canada but in a conference call Patheon CEO James Mullen announced that the Olds, Canada plant would be closing down by the end of 2013 fiscal year.
Almond said: “Given current resources and volume demand at the Olds site, the decision has been made to close the Olds facility and where possible, transfer products to our remaining locations.”
“Customers are being proactively notified and we will stay in close communication with them ensuring they have a clear understanding at all times of our path forward.”
According to a US Security and Exchange Commission filing Patheon expects to pay $3.7m in severance pay plus an additional $1.5m in closing costs. However, the shuttering of Olds will save the company $8m a year.
While Mullen told shareholders the purchase of Banner “represents an important accomplishment,” the winding down of Olds, according to Almond, “is consistent with Patheon’s overall strategy to strengthen core operations” and “is similar to the consolidation initiatives already executed at [the] Puerto Rico, Swindon and Canadian sites.”
The restructure has seen Patheon move away from certain areas in order to push profits back in the black. Last year 400 jobs were threatened at Patheon’s facility in Swindon, UK as the company moved forward in its restructuring plans. Patheon’s reorganization has also seen closure in Puerto Rico and streamlining in Canada and Switzerland in attempts to turn figures around.
As Almond explained: “Patheon is organized into two operating segments: commercial manufacturing operations and pharmaceutical development services, and with the recent acquisition of Banner, we anticipate adding a third business unit focused on proprietary products and technology.”
Earnings before interest, taxes, depreciation, and amortization were at $19.8m for the quarter compared to last year’s loss of $1.9m.
Patheon has predicted revenues of $1bn for 2013.