Novozymes predicts half-life boost for pharma business, but lets long term rev forecast slide on oil prices

By Gareth Macdonald

- Last updated on GMT

Novozymes Biopharma HQ in Bagsværd, Denmark
Novozymes Biopharma HQ in Bagsværd, Denmark

Related tags Biopharmaceutical

Novozymes finished 2014 with higher pharma revenues thanks in part to GSK's adoption of its albumin half-life extension technology, Veltis.

The Danish firm posted sales of 12.46bn Danish crowns ($1.94bn), an increase of 7% on 2013, with revenue from its business with the drug industry increasing 10% to 830 crowns.

Spokesman Thomas Videbaek attributed the pharma gains to growth of the firm's enzyme solutions and albumin-based businesses.

Videbaek told both businesses attracted new customers, however higher demand from existing customers drove the biggest gains citing UK drug major GlaxoSmithKline (GSK) as a particular growth driver.

GSK uses our Veltis technology to increase the half-life of its biologic molecule [a type 2 diabetes treatment called Eperzan (albiglutide)]​” he said, adding that “quite a number of other customers are already using it in preclinical and clinical development.​”

He also predicted that biopharma demand for half-life extension technologies for biological products will be a growth driver this year, although he declined to share any specific examples and instead said for Novozymes pharma business “2015 is about building for both the albumin and enzyme business​."

Videbaek also declined to comment if the lower raw materials costs reported across the Novozymes group had included the pharma businesses.

Reduced forecast

Despite the predicted pharma gains, Novozymes lowered its long terms sales guidance citing the negative impact of lower oil prices on its biofuels business.

Novozymes CEO Peder Holk Nielsen to CNBC that: “A low oil price probably will have an impact on biofuels. The corn ethanol business is moving ahead very well and we think it will be a healthy business in 2015…and the main input is oil, so it is likely corn will become cheaper.”

On the very long term, the option that we are creating of transforming a lot of the liquid fuel from oil to renewables…if the oil price stays at $40 the value of that option is going to be lower, but if you assume like a lot of people do that the oil price is going to move back up to $60 to $80 range then second generation ethanol will continue to move​.”

Novozymes now says sales will grow by between 8 and 10% through to 2020, which is down from the 10% growth it expected before.

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