Sales and profits increased at West Pharmaceutical Services in Q3, but rising manufacturing costs hit drug packaging systems earnings.
Total sales increased 4.8 per cent to $191.5m (€136.7m) coming in at the top end of West’s expectations of three to five per cent. Such attractive sales, said West, have contributed towards increased gross profits, which climbed by three per cent to $74m (€52.8m) over the past year.
But while sales from both West’s drug delivery and packaging businesses improved, only its drug delivery systems unit saw profits increase to $16.2m, up from 30 per cent since the same quarter last year.
West attributed the drug delivery gains to the addition of more contract manufacturing clients in the healthcare market and higher sales of products like its Eris safety syringes and prefillable syringe lines.
Drug packaging unit’s sales dip
Pharmaceutical packaging delivery systems, in contrast, saw gross profits fall to $58.5m (€41.8m) from $59.2m (€42.3m) in the comparable period a year ago due, according to West, to higher foreign exchange rates and increased production costs.
As a knock-on effect, packaging operating profits amounted to $29.4m (€20.9m), falling by $1.5m (€1.1m) from last year’s third quarter, though the firm admitted sales of its packaging systems are still recovering from the effects of last year’s non-recurrent packaging-related sales, totalling $9.7m (€6.9m), as well as an unfavourable foreign currency rate.
Despite this, is the firm maintained an upbeat outlook, revealing that sales of Westar-processed and FluroTec-coated products “continue to grow in all geographic regions.”
CEO Donald Morel Jr., explained that “Our Westar RS and FluroTec products have been engines of growth for several years,” with Europe seeing a 6 per cent rise in quarter three; North American sales increasing by five per cent, while combined sales from the firm’s Asian and South American businesses saw “faster growth,” which increased by 25 per cent.