Cambrex sees Q2 revs and earnings rise, confirms interest in takeovers
The US active pharmaceutical ingredient (API) company reported revenue of $134.6m (€114.2m) for the three months ended June 30, up 15% year-on-year. Operating income for the period was $25.1m, up from $20.8m.
Cambrex said the revenue gains reflected an increase in sales volumes which offset lower prices, explaining that “the increase in volumes was driven primarily by growth in innovator products and controlled substances, as well as the addition of Cambrex High Point.”
Cambrex also said that margin increased to 43% from 41%, explaining that high capacity utilization and manufacturing efficiency improvements drove the increase, partially offset by unfavourable product mix and lower pricing.
Cambrex also confirmed it plans to start building a facility for high potency APIs at its site in Charles City, Iowa before the end of September.
CEO Steven M. Klosk said: “We are making this investment to address a growing demand in the market for manufacturing capacity that is capable of handling highly potent products. We expect the new facility to be ready for production in early 2019.”
News of the project comes three months after Cambrex started installing a fourth reactor at its facility in High Point, North Carolina.
Costs associated with the new reactor – which is due to come online early next year – increased Cambrex’s costs in the quarter.
According to the firm selling, general and administrative expenses were $18.5m, up from $13.6m in the second quarter of 2016.
In addition to the facility costs Cambrex said it had incurred “higher expenses related to the evaluation of acquisition opportunities.”
This was confirmed by CFO Tom Vadaketh, who told analysts on the Q2 call that although organic investments are a top priority, Cambrex is interested in takeovers.
“There’s consolidation going on and we believe we’re the right company to participate in that kind of activity. So we are looking at these opportunities.”