For the fourth quarter 2017, active pharmaceutical ingredient (API) maker Cambrex Corporation reported record net revenues of $182m (€148m), up 2.5% year-on-year, while full year revenues rose by 9% to $535m.
Sales from innovator APIs were up on a full-year basis to $353m (although slightly down on record Q4 2016 sales) and according to CEO Steven Klosk the sector continues to be driven by several positive market trends.
“One, a strong preference among innovator for Western suppliers,” he told stakeholders on a conference call. “Two, a robust and growing small molecule clinical development pipeline. And three, an increasing desire by pharmaceutical companies to reduce their small molecule manufacturing footprint and outsource more.”
He added the business was boosted by a return to higher small molecule approvals in 2017, with 34 new chemical entities approved by the US Food and Drug Administration (FDA) during the year.
In the last decade, the industry increasingly sourced ingredients from lower-cost markets such as India and China to the detriment of Europe and the US, but a number of quality and reliability issues has seen somewhat of a reversal. This so-called ‘flight to quality’ is especially true for innovative and more complex APIs.
However, Cambrex’s largest product – an API used by a customer to produce an anti-viral drug – represented almost half its revenue in the sector ($173m), and Klosk said there will be significantly reduced volume of this produced in 2018 factored in with its expectations.
“Our goal is to grow the Innovator product category annually by double-digits over the next few years excluding the expected decline of our biggest product, a growth rate that would be significantly greater than the market.”
Cambrex intends to do this by winning later-stage clinical projects ready for commercialisation, Klosk continued.
“We have 16 such projects as we enter 2018 and our goal is to increase the numbers of projects we are handling at any time to about 25. We believe we will make good progress towards this goal over the next few years.”
The firm also hopes to grow its presence in highly active APIs (HPAPIs) which Klosk said represent about 30% of the global clinical pipeline and a third of all approvals for small molecules.
“We are well-positioned to meet clinical-stage demand in this category with our existing development and smaller-scale, high-potency capabilities at the Charles City site.
“Our new investments in a high potency active ingredient manufacturing facility at that site [$24m made last August] will expand those capabilities to position us to serve the full range of customer needs beyond the clinical stage.”
The facility is expected to be operational in early 2019.