Lonza ups 2016 forecast citing Q3 biopharma gains; says capex will be higher

By Gareth Macdonald

- Last updated on GMT

Lonza has raised its 2016 guidance and predicted higher spending on manufacturing equipment after growth of its biopharma businesses in the third quarter.

The Swiss life sciences revised its forecast this week​, predicting that operating profit, EBIT, for 2016 will be 15% higher than the CHF524m ($527m) it generated last year​.

Lonza cited gains made by its biotechnology business in the third quarter as the basis for the revision, explaining that expanded manufacturing contracts, higher volumes and customer products being approved for new indications were the key drivers.

It also said its bioscience solutions – expanded by the recent​ acquisition of Triangle Research Labs – had achieved “positive momentum” in the third quarter.

Demand for active pharmaceutical ingredients (API) – both those for small molecule drugs and biologics – also increased in the quarter. Lonza said it had “benefiting from continued strong demand for API development and clinical manufacturing services​.”

Higher Capex in 2016

Lonza has announced a number of API contracts in the second half of the year, the most recent​ of which was a deal that will see it produce commercial supplies of Clovis Oncology’s rucaparib.

Production will take place at Lonza’s facility in Visp, Switzerland on a dedicated manufacturing line the firm is building.

Lonza acknowledged the investment in its business update, commenting that “CAPEX in 2016 is expected to be above the 2015 level due to the strong demand particularly in Pharma&Biotech and the larger number of growth projects​.”

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