AMRI riding high on API acquisitions, expects more M&A to come
For the first quarter 2015, the contract development and manufacturing organisation (CDMO) reported revenue of $75m (€67m), up 47% year-on-year, though increased operating costs left a net loss of $2.2m.
The active pharmaceutical ingredient (API) business saw sales increase 27% y-o-y to $38m attributed to an increase in API shipments and the addition of Cedarburg Pharmaceuticals, acquired in March 2014, and CEO William Marth told investors the acquisition was likely to drive growth over the next nine months.
"With the addition of Cedarburg we have established a core portfolio of APIs which we plan to augment within licensing and internal development through the year," he said on a conference call yesterday.
"We anticipate filing 6 to 8 DMFs [Drug Master Files] in 2015 and began marking our portfolio to customers," he said, adding most of the work is being done either at the Cedarburg plant in Wisconsin, or AMRI's Rensselaer facility in New York, with some of the R&D being done in India.
"Some of these [API DMF's are in] very narrow areas. Whether it'd be in controlled substances primarily and a little bit in ophthalmic, these are areas where there is a lot of potential for these low volume high value APIs."
While the API business is growing, AMRI took the decision to close its manufacturing facility in Holywell, Wales, last month - laying off 62 workers - after efforts to use the site as a conduit between US and European operations proved unsuccessful.
The company has begun product transfer and phase-out activities at the site and expects to incur certain related charges which could total over $10m.
The Holywell closure followed that of its discovery and development plant inSyracuse,NY.
"All the things we've done whether it's headcount reduction, ratios of scientists all these types of manoeuvres, we've done to enhance our business," Marth told stakeholders.
More acquisitions to come
Despite this, in the past year the firm has acquired sterile contract manufacturer Oso Biopharmaceuticals for $110m, and two ex-Aptuit units, on top of Cedarburg, and Marth says the firm is looking for more M&A this year.
"It's my intention to get at least one if not two or more deals done yet this year," he said on the call, adding that he'd " love to see us have a custom synthesis site in Europe and be able to expand further into the European market."
Furthermore, he reiterated comments made in March that AMRI was on the hunt for added API capacity inIndia.
"I'd also really like to increase our ability to access the generic markets today faster and do that vis-à-vis an acquisition in India where I could get a US FDA approved facility."
AMRI currently has an large API manufacturing site in Aurangabad though for now it lacks the FDA's approval.