Royal DSM expects its pharma unit to perform better in 2013 driven by a generics and end-of-lifecycle drug-focused partnership strategy.
The firm reported pharma operating income of €13m ($17.4m) for the fourth quarter, up from €11m in the comparable period in 2011, attributing the modest growth to higher volumes and uneven delivery patterns in its custom manufacturing business.
Board member Stefan Doboczky told in-Pharmatechnologist.com the gains were driven my higher sales volumes at DSM Pharmaceutical Products (DPP) and good pipeline development as customer projects move forward
Doboczky also cited price hikes at its anti-infectives JV DSM Sinochem pharmaceuticals , explaining that had been possible because the business is seen as “the leader in emerging markets, despite competition in China and India.”
Pharma in 2013
Doboczky went on to predict that DPP's business would see better results in 2013 driven by continued pipeline development and the contribution made by the 6-APA manufacturing plant DSM set up in China.
He also said the new DSM Biologics biomanufacturing facility in Brisbane, Australia will make a positive contribution adding that the firm has “already lined up several customers.”
Another major growth area is the generics sector according to Doboczky citing the ingredient atorvastatin – for which DSM Sinochem was granted a certificate of suitability (CEP) by European authorities in September – as an example.
Doboczky added that generics will also be a key focus for its pharma partnership strategy, explaining that: “We want to position ourselves in areas of highest growth potential such as drugs about to go off patent – end of lifecycle drugs – and generics.”
Profit improvement plan
DSM will also cut jobs in 2013. Last August the firm announced it will cut over 1,000 jobs in a profit improvement programme designed to deliver annual EBITDA benefits in the region of €150m by 2014.
This plan looks set to expand, with DSM reporting that it “continued to look for opportunities to expand this program and this has resulted in an increase in the program’s scope to € 200-250m in benefits.”
Doboczky declined to say how the company-wide cuts will affect DSM’s pharmaceutical industry business.