The Hovione Group revealed its yearly figures for 2005, which revealed that sales grew by 8 per cent. The company's performance is in contrast to the pharma fine chemicals sector, which between 2002 and 2004 had an average 14 per cent negative sales growth.
The contract API manufacturer recorded a sales figure for the fiscal year (ended 31st March 2005) of $81.4 million (€66.1 million), representing a growth of 8 per cent over the previous year.
Hovione's performance in the current climate reflects the value of the investments the company has made within the past 3 years. Hovione has chosen to invest in the field of particle design.
The company said in a statement that spray-drying and spray-congealing at very low temperatures have taken Hovione to near nano-scale particles. Hovione added it was offering this service at its Portugal site at the lab, pilot and industrial scale all within a GMP compliant environment and would soon be offering similar services from Technology Centre in the USA.
Hovione's Technology Transfer Centre (TTC) in the USA has contributed not only to strengthen Hovione's presence in the US market, but also to contracting an increasing number of new projects from US and European biotech companies.
In terms of geography, Hovione sales mirrored the world pharma market, with the USA accounting for almost half its sales, Europe and Japan with even shares, and about 10 per cent going to markets such as Australia and Singapore.
"Although our results are unsatisfactory with an EBITDA of $16m (against $18m in 2003), this is still a good performance when the harsh environment we face is considered. We continue to be affected by the strength of the dollar - over the same period our major invoicing currency has weakened 41 per cent," said Guy Villax, CEO of Hovione.
"In Generics, both in the USA and in Europe, companies are facing aggressive price-cutting from new entrants, mainly from India. Our success is primarily due to the increasing differentiation of the products Hovione offers," he added.
In an interview with Drug Delivery Technology magazine in March 2005, Villax commented that the API mindset of Hovione means that it sells final APIs, which are used for oral, topical, injectable, or inhaled administration.
"Intermediates are not our business," he said. "Our approach differentiates us from the competition that is often mostly focused on intermediates. The large pharma's tax strategies have blinkered most of the outsourcing fine chemicals industry to ignore the galenic needs that are paramount downstream."
"We have been aware of polymorph issues, particle size distribution, flowability, density and compressibility, electrostatic charges, VOC content, etc for a long time," he added.
Hovione said that exports from Portugal had decreased by 4.2 per cent. However supported by its New Jersey Technology Transfer Centre, income from sales of R&D process development services were positive, almost doubling over 2003.
Commenting on the future prosperity of Hovione, Villax said that its sales were $65 million in 2002, $75 million in 2003, and in 2004, they would be $81 million.
"Unfortunately, when converted into Euros, the numbers indicate somewhat of a stagnating performance around 65 million, which means that with a majority of our operations located in the Euro zone, we are suffering from the Dollar weakness, which is frustrating."
"When we have a good year, our EBITDA is usually in excess of 30 per cent, when it's bad, it is around 25 per cent."