The Charles City, Iowa facility manufactures active pharmaceutical ingredients (APIs), fine chemicals and pharmaceutical intermediates, and will benefit from a second expansion of $45-50m to in as many years in order to support increased customer demand.
In May 2013, the facility added an additional 40,000 gallons of reactor capacity which equates to an extra ten tonnes of API annually, and this time around an initial 70 cubic meters of glass lined and hastelloy reactors will be added to significantly increase the cGMP manufacturing capabilities of the site.
“The expansion this time really is a reflection of the visibility of our business, input from our customers and what we see as continued positive market trends,” CEO Steven Klosk told investors in a call discussing end of year results.
“Our interest in late-stage projects and quite frankly a realisation that if we did not invest we could not continue our growth in 2016-7 [drove this expansion],” he continued, and when asked whether Cambrex has turned down business due to lack of capacity he said: “We have not done so but if we do not invest now we would potentially be in that position in 2016.”
The Charles City site comprises of four full-scale multi-purpose facilities, a cGMP pilot plant, and a high-potency API development centre, and is also approved by the DEA to import Schedule II-IV controlled substances at commercial scale.
Pharma moving back West?
With many Western pharma firms sourcing their APIs from low-cost countries such as India and China, we asked Cambrex how a site like Charles City can compete.
“The US plant is profitable due to producing high quality products combined with efficiency and innovation,” spokesperson Stephanie Harrison told in-Pharmatechnologist.com.
“Over the past few years, we have seen pharma moving back to western providers and increased outsourcing of APIs to western CMOs for their higher quality and reliability standards.”
Network Expansion
CFO Gregory Sargen said total CAPEX in 2015 is expected to be $80-85m, and while most of this will focus on Charles City, money will be spent increasing capacity across the firm’s manufacturing network.
“CAPEX in 2015 also includes increased capacity at our site in Sweden to support new late-stage clinical projects some of which we have already won. We are also investing at our Italian plant to improve our generic API development capabilities and the cost-effectiveness of these activities,” he told stakeholders.
“We believe this significant allocation of capital will ensure we can satisfy what we believe will be strong ongoing demand in the coming years, in particular the demand for large-scale cGMP assets.”
For the full year, Cambrex reported net sales of $129m, up 25% year-on-year. The bottom line was up over 200% to $28m.