Large Scale Manufacturing Drives AMRI Q1 Revenue Uptick

By Zachary Brennan

- Last updated on GMT

Related tags: Large scale manufacturing, Pharmacology, Amri

Large Scale Manufacturing Drives AMRI Q1 Revenue Uptick
Large scale manufacturing contract revenue in the first quarter of 2013 increased 14% over the same quarter in 2012 as AMRI (Albany Medical Research Inc.) saw an 11% increase in overall revenue. 

This increase in large scale manufacturing is “primarily attributable to a strong API business, particularly at our India and UK operations​, along with continued growth at our Rensselaer [New York] facility,​” Michael Nolan, AMRI CFO and treasurer, said in a conference call last week.

For the second quarter of 2013, the company expects its large scale manufacturing will grow by 20% to $30-31m, at the top end its predictions, Nolan said.

New and extended multi-year API supply agreements “provide a base on which to build new and recurring business​,” Dr. Thomas D’Ambra, chairman, president and CEO of AMRI, said in the call. An API contract from early April with a specialty pharma company that requested anonymity will help support the commercial launch of several oncology drugs, Dr. D’Ambra said.

The company’s “discovery services” contract revenue for the first quarter was $11m, an increase of 13% from $9.7m in 2012, which Nolan said “reflects growth in our medicinal chemistry business, including a full quarter of insourcing business with [drugmaker Eli] Lilly offset with lower biology revenue​.” AMRI is currently developing 22 compounds in Phase 3 trials as part of its contracts, as well as 51 others in Phase 1 and 2 trials.

Dr. D’Ambra noted the problem of excess capacity in early development services, but pharma companies’ Phase 3 pipelines “are strong overall​” and the FDA’s high level of drug approvals in 2012 is expected to continue this year.

I think you’re going to see more virtual [drug development] companies​,” Dr. D’Ambra said. “The opportunity for outsourcing companies like AMRI is tremendous and at the same time, the days of a lot of new start-ups is over," ​so the industry is going to be largely controlled by the companies that exist today.

Development and small scale manufacturing contract revenue for the first quarter was $9.1 million, a decrease of 7% from $9.8 million in 2012, which was consistent with expectations and comes because of a “particularly strong [quarter] in 2012 as a result​” of some rollover of planned 2011 revenues, Nolan said. He added that the company closed its research and development center in Bothell, Washington​, which was first announced in November 2012, and is transitioning to Singapore and Albany, NY, Nolan said.

The company maintains its revenue outlook for the year of $205-$213 million, reflecting growth at the top end of up to 12%,​” Nolan added. AMRI also predicts “strong cash flow​” in 2013, he said. 

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