US FDA approval of Crystal Zenith product a 'milestone' for West

By Dan Stanton

- Last updated on GMT

Related tags Revenue

US FDA approval of Crystal Zenith product a 'milestone' for West
West Pharmaceutical Services expects annual revenues of up to $5m following the US FDA approval of a client’s product which uses West’s Crystal Zenith delivery system. 

Developed by Japanese company Daiichi Seiko, the Crystal Zenith (CZ) system comprises of vials, cartridges and a 1ml long syringe and has been billed as a potentially massive earner​ for West Pharmaceutical Services which manufactures and markets the drug delivery device.

During a conference call to discuss Q1 2015 results last week, the firm said sales of CZ and the firm’s other drug delivery unit SmartDose increased 42% year-on-year to $5.4m (€5.1m) but a recent regulatory endorsement means CZ is one step closer to realising its potential.

“We were notified by our customer that the 50 ml CZ vial previously discussed for an existing product had received regulatory approval,”​ Chairman Don Morel said. “We expect revenues at peak volumes for this product to be in the range of $4-5 million per year.”

Furthermore, a new oncology product packaged using a 2 ml CZ vial received recommendation at a recent advisory committee meeting. “I’m very encouraged by the progress seen during the past few months on both our CZ and device platform programs.”

Jefferies’ analyst David Windley described the news as “a milestone in West’s strides toward proprietary product-driven growth and margin expansion,” ​adding that while the revenue opportunity at present is still small these delivery systems are advancing.

Capacity Ramp Up

West is in agreement, with Morel telling stakeholders he expects a ramp up in CZ activity over the next 12-24 months.

“We are in the process of expanding our Dublin [Ireland] facility to accommodate additional volumes for an existing program and one substantial new program we expect to commence production in mid-2016,” he said.

“We’re also adding SmartDose capacity to our Scottsdale, Arizona site to support anticipated growth in demand during the latter part of 2015. This expansion includes the ability to mould CZ cartridges for using SmartDose system.”

For the first quarter, net sales across all of West’s divisions stood at $336m, down 3% on the same period 2014. However, net income was up 10% to $33m.

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