Lonza scores 18 per cent net profit on biopharma strategy

By Susan Gotensparre

- Last updated on GMT

Swiss chemicals firm and contract manufacturer Lonza has announced
18 per cent rise in net profit in 2006 rising to CHF 222m (€137.4),
fuelled by its strategic move into biopharmaceuticals.

The group reported a rise in earnings before interest and taxes (EBIT) of CHF 344m (€212.8) for the full-year 2006, 15.8 per cent higher than for the same period in 2005. The sales rose 15.6 per cent to CHF 2.91bn (€1.8bn), attributed by the firm to a continued improvement in its biopharmaceutical activities, with almost half of the sales increase resulting from higher raw material prices. The Lonza group said that its successful year was due to implementation of its business strategy, which transformed the business to focus on life sciences through acquisitions and expansions. In line with this strategy, the firm sold assets of its non life science business, such as Polypont and LOFO, and expects that 90 per cent of its 2007 sales will come from its life science business. Lonza's two customer-manufacturing divisions, exclusive synthesis and biopharmaceuticals, increased its sales figures by 33.6 per cent to CHF1073m (€663.7), while EBIT rose 35.9 per cent to CHF 193m (€119.4). "Lonza made the strategic shift from a broadly aligned chemistry company to a chemistry and biotech company that focuses on life sciences,"​ Dominik Werner, corporate communications officer at Lonza, told In-Pharmatechnologist.com. " This was a strategic decision to secure the future of Lonza. The Life Sciences are an industry with immense potential for the future and contract manufacturing is an important business area in this sector."​ During 2006, Lonza acquired a mid-scale mammalian cell culture facility (Porriño, Spain) and started to build a large-scale mammalian manufacturing facility in Singapore. They also announced that its fourth 20,000-liter bioreactor (Portsmouth, Newampshire, USA) and the first of two 15,000-liter capacity bioreactors (Visp, Switzerland) had started up on schedule. In addition, Lonza expanded its laboratory facilities and clinical production capacity at Slough (UK). "But, Lonza is not trying to get out of the specialty chemicals business. The business remaining with Lonza still generates a good return on investment and creates synergies for our Biopharmaceutical (LBP) and Exclusive synthesis (LES) businesses (shared infrastructure and supplier for ingredients used in the LES-business),"​ said Werner.

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