Allegra and BMS deal boost AMRI Q2 profit
Albany Molecular Research Inc. (AMRI) has posted encouraging financial results in the second quarter of the year, boosted by both bigger royalty payments and steady growth in its contract business.
In addition, the company recorded a $6.5m operating income in the quarter, a substantial improvement from the year-ago quarter when the company posted an operating loss of $1.1m. Although this included one-time charges of $2.2m related to the company’s former research centre in Mount Prospect near Chicago, Illinois.
Total revenue for the second quarter of 2007 was $49.4m (€35.9m), an 8 per cent increase compared to $45.6m in the second quarter of 2006.
Revenue was boosted by a $1.5m milestone payment resulting from the company’s licensing deal with Bristol-Myers Squibb (BMS) in the second quarter of 2007 as a compound being developed under the agreement will soon enter the preclinic, triggering payment to AMRI.
Meanwhile, recurring royalties from antihistamine drug Allegra (fexofenadine) in the period improved and reached $7.8m, an increase of 9 per cent compared $7.2m in 2006.
AMRI earns royalties from worldwide sales of Allegra, as well as the authorised generic, for patents relating to the active ingredient in the drug. Sales of Allegra have been stable in the last year following a massive drop at the end of 2005 due to the launch of a generic version by Barr and Teva Pharmaceuticals in the US
Since then the company has been increasingly relying on its contract services business which performed relatively well in the second quarter, generating $39.9m, up 4 per cent compared to $38.4m in the same quarter last year. The business includes discovery services, small scale manufacturing and large scale manufacturing services.
The best performer of the contract business was the development and small scales manufacturing segment which generated a $10.6m in the quarter, a 25 per cent increase compared to $8.5m in the second quarter of last year. The company said the improvement results from “continued strong demand for this type of services”.
Sales in the discovery services segment also increased, by 6 per cent to $9.7m, an jump attributed by the company to “higher demand for these services in the US and Singapore”.
In contrast, revenue from large scale manufacturing in the second quarter of the year was $19.6 million, a 5 per cent decline from $20.8m in the second quarter of 2006.
“The decrease resulted from the timing of certain large scale clinical development manufacturing projects,” AMRI said, adding that it expected to recover revenue from most of these projects in the second half of the year.
The company, which has suffered of late from sub-optimal profitability at its large scale manufacturing facility in Renhsselaer, New York, recently signed a definitive agreement to acquire two pharmaceutical production sites in India for $11m.