The active pharmaceutical ingredient (API) manufacturer took a cautious approach to 2009 and, although the economy has stabilised, it is predicting flat or lower sales in 2010.
Smaller clients still face a difficult funding environment, leading to reduced business for Cambrex, and forecasts are lower than expected for some of the company’s larger products. In some cases the forecasts are lower than 2009.
These issues are compounded by the pricing pressures that are still being applied. For example, Cambrex renegotiated an extension of an important contract in the fourth quarter and made price and volume concessions to ensure it keeps the majority of the business over the next three years.
To counteract these issues Cambrex has identified opportunities to grow revenues. Advancing its pipeline of controlled substances and drug delivery technologies is viewed as a revenue generator and Cambrex is willing to invest the resources needed to achieve this.
“We are convinced that we need to invest more aggressively, both internally and externally, in niche markets, novel technologies, and new geographies that generate sustainable growth”, explained Steven Klosk, CEO of Cambrex.
These measures, coupled to the launch of generic APIs and further cost cutting measures, are intended to help Cambrex grow its business despite the economic environment.
Financial results
Cambrex’s operating income for the fourth quarter of 2009 increased by 106 per cent to $3.7m (€2.7m). However, when the impact of foreign currency exchange is excluded operating income decreased by $1.4m.
For the full year Cambrex’s operating income, including the impact of currency exchange, increased by 37 per cent to $26.6m. Net revenues for 2009 dipped by 5.9 per cent to $234.5m.