Active pharmaceutical ingredient (API) manufacturing generated revenue of £217m ($243m) for Johnson Matthey in the fiscal year ended March 31, up just 1% year-on-year. Operating profit for its fine chemicals division was down 7% to £82.3m.
The firm attributed the drop in profit to a fatal accident in July 2015 that resulted in the temporary closure of its plant in Pennsylvania – known as Riverside - and to lower bulk opiate sales.
“Demand for bulk opiates was lower primarily as a result of increased imports of finished drug products from outside the UK.”
The firm also reported a “reduction in sales of APIs for Attention Deficit Hyperactivity Disorder (ADHD) treatments due to lower volumes and the timing of some orders.”
In contrast, specialty opiates performed better. The firm said it had seen increased demand for ingredients “used in pain relief and drug addiction therapies” during the 12-month period.
Johnson Matthey generated the majority of its revenue in fiscal 2015/16 from the refining, management, distribution and recycling of precious metals.
Emission control technologies were the next biggest earner with revenue climbing 7% to £3.48bn. Process technologies was the next biggest division contributing £541m, down 8%, followed by precious metal products, which brought in £343m, down 18% year-on-year.
The firm’s fine chemicals division – which consisted of its API business, its catalysis and chiral technologies operations and its research chemicals units for most of fiscal 2015/16 – generated revenue of £296m, down 10%.
Johnson Matthey attributed the decline to the divestiture of its research chemicals unit Alfa Aesar to Thermo Fisher and flat API sales, which offset 15% growth of its smaller catalysis and chiral operations.
Despite this, the firm said it expects its API business to grow this year.
“We anticipate growth in the API Manufacturing business in North America, and our business in Europe will benefit from increased capacity once the refurbishment of the Annan facility in Scotland is completed in late 2016.”
The firm also cited the acquisition of Pharmorphix in October as likely to have an impact.