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Johnson Matthey to optimise API biz; Fine Chem forecasts roundup

By Gareth Macdonald , 11-Feb-2013
Last updated on 11-Feb-2013 at 14:18 GMT

in-Pharmatechnologist.com presents a roundup of news in the fine chemicals sector, beginning with Johnson Matthey which has started a review of its active pharmaceutical ingredient (API) business after competition in the UK impacted its third quarter margins.

UK-based Johnson Matthey announced the move in its interim statement, explaining that although fine chemicals sales grew 2 per cent in the three months to December 31 to £63m ($93m) “changes to the competitive landscape in the UK… impacted the business.

Further details were not provided, however the comments echo those Johnson Matthey made in November when it said unspecified market changes had impacted the performance of its Scotland based API unit, Macfarlan Smith.

The chemicals maker also mentioned APIs in its forecast for the rest of the financial year.

The underlying performance of our Fine Chemicals Division in the second half of the year is expected to be slightly behind that in the first half. A review is underway to look at ways in which we can optimize resources across our API manufacturing businesses.”

In addition to opiate alkaloid producer Macfarlan Smith, the firm’s API business includes Johnson Matthey Pharmaceutical Materials and Services based in New Jersey US which makes ingredients for pain management and attention-deficit hyperactivity disorder (ADHD).

Johnson Matthey did not say what its optimization plan will involve or respond to in-pharmatechnologist.com request for further information.

Meanwhile on the other side of the Atlantic, FMC Corporation predicted that investments made in its pharmaceutical chemicals unit – FMC Bioploymer – have position the business for growth.

The firm – which reported its full year results last week – said revenue from specialty chemicals increased 6 per cent to $236m with its Biopolymer division seeing 'steady performance' and sales growth in the mid-single digit despite currency effects.

FMC did not say what had driven the gains, but did say that capacity investments - particularly the ability to make more microcrystalline cellulose (MCC) gel which is used in drug formulation and capsule production – will be important to the units performance.

CEO Pierre Brondeau said: “Our Biopolymer business will benefit from capacity increases” citing the MCC plant the firm is building in Thailand as an example.

Also in the US chemical firm Ashland said that sales to the drug industry have been one of the few positives for its specialty chemicals business of late.

Ashland’s specialty ingredients division saw sales fall 1 per cent to $622m for the three months ended December 31 as a result of customer destocking in emerging markets and declines in its intermediates and solvents businesses.

The contrasts with Ashland’s pharmaceutical business, which saw year-over-year sales and gross profits increase according to COO John Panichella, who predicted further growth.

We continue to expect our differentiated, more technically advanced businesses, such as pharmaceutical and personal care will remain strong.”

This was echoed by CEO James O’Brien who said: “Overall, the growth that we’re going to get will be in the pharmaceuticals and hair care and the personal care.”

Fine chemicals were also an important driver for Sigma Aldrich in the fourth quarter, with revenue from SAFC climbing 5 per cent.

CEO Rakesh Sachdev said: "Our custom manufactured products for the pharma industry grew double digits and we saw solid growth in our industrial cell culture media for production of biological drugs.

Sigma announced plans to reorganize SAFC into a more ‘customer facing’ operation last year , which is a strategy Sachdev thinks will position the unit for further expansion.

We expect to drive improved growth in 2013 through our enhanced focus on our customers and faster growing geographies enabled by our recent organizational realignment into three business units — Research, Applied, and SAFC Commercial — which should continue to gain momentum as the year progresses”. 

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