Cambrex predicts flat generic API sales for 2016

Cambrex to start work on Pharma 4 API site in 2016

By Gareth Macdonald contact

- Last updated on GMT

iStock\Gajus
iStock\Gajus

Related tags: Revenue

Cambrex has said it will invest around $20m in its Pharma 4 API facility before the end of the year in an effort to get ahead of the capacity utilisation curve.

The US active pharmaceutical ingredient (API) manufacturer outlined the plan to start work on Pharma 4 – currently an empty shell set up at its site in Charles City, Iowa – during its second quarter conference call earlier today.

CEO Steven Klosk told analysts Cambrex will start designing the facility and identifying the manufacturing equipment required before the end of the year and predicted the plant would be operational around 12 months after the process begins.

He also suggested the project would cost around $20m (€18m).

The plan comes a month​ after Cambrex’s newest facility at the site – Pharma 3 – became operational.

CFO Gregory Sargen said the firm’s Pharma 4 plan is driven by the expectation that capacity utilisation at the Pharma 3 facility will ramp up quickly.

He also said the idea is to “get ahead of the capacity utilisation curve​,” explaining that the firm’s previous approach of building capacity in response to demand had meant it “lost some opportunities​.”

Second quarter growth 

Revenue for the second quarter ended June 20 was $119.1m (€107m), up 11% excluding currency impacts. EBITDA increased 6% to $36.7m.

Klosk attributed the gains to growth in all three of Cambrex’s categories – innovator drug ingredients ($76m, up 11%), generic APIs ($28m, up 7%) and controlled substances ($15m, 21% up) – adding that firm’s 26% profit margin was due to “strong capacity utilization​.”

Cambrex added two late phase projects – one for a drug in Phase III and one for a commercial product - to its innovator business in Q2. Klosk predicted that, if the clinical product is approved, it will generate $5m-10m.

The commercial product is expected to generate more than $20m a year, starting in 2018.

On a more negative note, Klosk said that one of its customers terminated clinical development of a product that had been expected to generate more than $10m in annual revenue in the quarter.

European expansion

Klosk also predcited that - including the $20m it will spend on Pharma 4 - Cambrex expects to invest $70m-$75m in capital projects this year, an increase on the $60m it spent in 2015.

He said "we are also making additional improvments and capacity expansions at our manufacturing sites in Sweden and Italy​" but did not provide further details.

Guidance

Cambrex increased its revenue and earnings guidance for the year.

The firm now expects to sales to increased 10% to 13% on 2015 and earnings to be between $144m and $149m, up between 12% and 16% year on year.

Klosk said the revision was “based on performance in the year to date, and high level visibility for orders during the second half of the year."

Full year growth will be driven by innovator APIs according to Klosk who said Cambrex's generic API revenues would be flat for the year. 

"Expected orders for the second half of 2016 show softness in certain products so we now expect revenues from generic APIs to be approximately flat compare with prior guidance of low to mid single digit percentage growth​."

Related news

Show more

Related products

show more

Innovations in OSD

Innovations in OSD

Recorded the 06-Oct-2020 | Webinar

This DFE series of educational webinars looks at innovations in Oral Solid Dose Forms with the emergence of advanced technologies such as Continuous Manufacturing...

Register for free

Lactium, your ally to manage day to day stress

Lactium, your ally to manage day to day stress

Ingredia | 27-Aug-2020 | Product Presentation

Stress has been called the ‘health epidemic of the 21st century’ by the World Health Organization. Increasingly, consumers are looking for safe, reliable...

Related suppliers

Follow us

Products

View more

Webinars