APIs prop up Bachem in 2003
continued slack demand for research chemicals held back a modest
increase in its active pharmaceutical ingredients business.
Full-year turnover of SF 144.8 million (€92.6m) failed to meet analysts' expectations, and was particularly affected by currency factors. Bachem makes 35 per cent of its sales in the US, so is exposed to the impact of the weak dollar against the euro. Excluding this effect, sales rose just under 2 per cent.
Sales of research chemicals fell 15 per cent to SF 35.2 million, hit by sluggish ordering from pharmaceutical companies and academia and reflecting a widespread reluctance to invest in research in the current weak economic environment, according to the company.
Bachem's US business was particularly affected by these factors, it said, and the firm's custom synthesis business was also hit here by 'substantial price pressure'.
The API division rose fractionally (0.2 per cent) to SF 114.7 million, and there are signs that new contracts will advance this business in 2004. Last month, Bachem signed a five-year agreement with Amylin Pharmaceuticals of the US for the supply of exenatide, a drug for the treatment of diabetes that is currently in Phase III trials and partnered with Eli Lilly.
Analyst Urs Tuor of Sarasin in Switzerland said that this compound has the potential to become one of Bachem's top five products, with annuals sales of SF5-10 million.
In addition, earlier this month the Swiss company entered into a five-year deal to make a generic peptide, leuprolide for hormonal cancers, with Oakwood Laboratories.
Looking ahead, Bachem said that it could not predict a recovery in research chemicals in 2004, although it expects "an improvement in economic conditions for this segment in the course of this year".
