Lonza CEO: "We are capitalising on organic growth opportunities"

The business update released by the Swiss CDMO shows double-digit growth with sales in pharma and biotech contributing 14%

Lonza CEO Richard Ridinger

Lonza, the contract development and manufacturing organisation (CDMO), has released its Q3 business update. Presenting the results, CEO Richard Ridinger said the company enjoys "a strong momentum" for its businesses along the healthcare continuum.

According to Lonza's pro-forma report, sales in the six month period to July 2018 (H1 2018) totalled CHF$3.079m (US$3.061m), 8.2% up compared to the same period last year. The IFRS result shows the overall growth is up 33.3%. Its Pharma & Biotech division contributed to the H1 2018 performance with 14.7% organic sales growth.

Ridinger said the company is confident it will achieve the full-year 2018 target while it prepares for further investments and ongoing operational improvements in 2019.

Lonza also confirmed that its mid-term goal is to achieve CHF7.5 billion (US$7.45bn) by 2022.

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Business strategy

Lonza's three-pillar strategy for sustainable growth was presented at the Capital Markets Day in September. The healthcare continuum (prescription, prevention, protection and preservation) spans all of Lonza's businesses, namely pharma and biotech, consumer health, and healthcare environment.

Ridinger explained: "A highlight of the last quarter was clearly our Capital Markets Day in September, where we had the chance to discuss our growth trajectory toward and beyond 2022. We emphasised that we are focusing our investments and initiatives on our core markets along the healthcare continuum.

"We are capitalising on attractive organic growth opportunities, like the recently announced expansion of our Ibex Solutions offerings in Visp that provide clinical development and manufacturing services along the whole value chain and now include fill and finish."

As part of its growth plans, Lonza acquired a majority stake in Ontario-based Octane Biotech. The move, the company said, aims to further develop its autologous technology offering.

"Within Lonza’s Specialty Ingredients segment, the newly formed Consumer Health division performed extremely well, driven by the momentum for nutritional ingredients for supplements and functional foods and delivery forms. We also had strong positive momentum for offerings for institutional and household hygiene applications," Lonza CEO commented.

Both Commercial Mammalian & Microbial Manufacturing and Clinical Development and Manufacturing are experiencing strong demand, Lonza said in its business update.

Ongoing expansion plan

The company also revealed that all major investments in Pharma & Biotech that have already been announced are progressing as planned.

The expansion plan includes single-use bioreactors in Singapore (SG), in hybrid mid-scale technologies in Portsmouth, NH (US), in cell and gene therapy in Portsmouth and in Houston, TX (US), in biological manufacturing in Ibex Solutions in Visp (CH), and in encapsulation capabilities in Tampa, FL (US). Expansion of production capacity in Lonza’s Greenwood, SC (US) site to combine capsule production, ingredient production and finished dosage form development is also progressing as planned.

Construction at the Visp site is well underway, and it will become operational by 2020.

"Pharma hard capsules and dosage form and delivery systems continue to perform above expectations due to buoyant customer interest and capturing of cross-selling synergies," reads the report.

The business update also shows that Lonza's Consumer Health businesses experienced ongoing momentum for offerings in nutritional ingredients and functional food supplements. According to Lonza, "the hard capsule demand continues to be strong across all regions with speciality polymers and innovative offerings driving growth, e.g. Lonza’s delayed-release capsules (DRcaps) for speciality applications".

Lonza also reported that the businesses in professional and consumer hygiene are performing well, driven by a tighter regulatory landscape and demand across all regions for modern hygiene solutions and effective prevention against pathogenic micro-organisms.

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