Biopharma sector hits Cambrex 3Q hard
growth in its Bioproducts and Human Health segments. The company's
troublesome BioPharma division continues to underperform,
indicative of a market for outsourced manufacturing of biological
drugs.
The company, which provides contract production and development services for pharmaceutical and biotech companies, attributed an overall sales increase of 5.3 per cent per cent to sales within these segments.
However its figures for the third quarter 2005 decreased 26.3 per cent to $8.4 million (€6.9 million) from $11.4 million in the same period 2004.
Biopharma's gross margin decreased to -25.5 per net versus 16.6 per cent in the third quarter 2004 principally due to lower volume and adverse revenue mix.
"While the timing of projects impacted the quarter, we have several late stage projects which are expected to provide us with a sound foundation for 2006," commented John Leone, Cambrex president and chief executive officer.
"We anticipate the Biopharma business to approximately break even in the fourth quarter 2005, a significant milestone in its recovery."
Whether Cambrex can achieve this feat remains to be seen in the hostile contract manufacturing environment in which Cambrex is a major player.
While regulatory delays and hold ups at its customers have hit Cambrex significantly, such delays are part and parcel of the contract manufacturing environment.
Cambrex, who have downgraded the long-term value of the unit, have often given the view that biological production capacity is in such short supply, and suggests that the competition for available contracts is getting fiercer.
The company's Human Health sector, which consists of small molecule Active Pharmaceutical Ingredients (APIs), advanced intermediates, imaging chemicals, and fine custom chemicals - increased 12.0 per cent to $60.4 million, from $53.9 million in the third quarter 2004.
Cambrex stated that the increased sales reflected higher volumes of advanced intermediates, APIs and animal health products.
"Custom development revenues increased 39 per cent in the quarter, an encouraging indicator of the future growth of the Human Health segment," commented Leone.
"We continue to build momentum with a robust project portfolio of late phase projects."
The wider pharmachem sector has undergone recent difficulties with lower gross sales of generic APIs, pharmaceutical advanced intermediates, and fine custom chemicals.
This was partially offset by increased sales of certain branded APIs. Products, such as the Alzheimer's disease drug memantine (sold by Forest Laboratories as Ebixa) and certain other cardiovascular and central nervous system APIs, showed continued growth.
Cambrex's Bioproducts segment sales in the third quarter 2005 increased 5.2 per cent to $35.7 million up from $34.0 million in the third quarter 2004.
This was due to higher volumes and pricing in both research and therapeutic application categories.
The Bioproducts segment, which includes products and services for research and therapeutic applications, recorded a sales increase of 5.2 per cent to $35.7 million, from $34.0 million in the third quarter 2004.
The company attributed this to higher volumes and pricing in both research and therapeutic application categories.
"We did see some weakness in the research market in the quarter and as a result, sales growth was slightly less than expected," said Leone,
