Lonza confirms drug firm was biggest customer in 2016

By Gareth Macdonald contact

- Last updated on GMT

Lonza confirms drug firm was biggest customer in 2016
Lonza's biopharma business grew faster than other divisions in 2016 with a drug firm becoming the Swiss life science supplier's biggest customer for the first time since 2013

According to its full year report published this week, Lonza generated total revenue of CHF4.13bn ($4.12bn) in 2016, which is up 8.7% year-on-year.

Its biggest customer, an unnamed firm which contributed 5.3% of the contract manufacturing organisation's (CMO's) revenue, was a drug industry client of its Pharma&Biotech segment.

This contrasts with 2013​, 2014 and 2015​ when Lonza's biggest customers were supplied by its specialty ingredients business.

Specialty ingredients still made the largest overall contribution in 2016, bringing in revenue of CHF2.29bn, up 3.1% on 2015. However, the Phama&Biotech division saw the biggest growth, with revenue increasing 14.7% to CHF1.87bn. 

Lonza cited the Pharma&Biotech business as key to the increase in total revenue in 2016 explaining that: “The outstanding improvements were particularly driven by commercial excellence and strong operational execution in the Pharma&Biotech segment​.”

Pharma and biotech

Gains were seen in all parts of the Pharma&Biotech segment.

Lonza reported strong growth in its mammalian manufacturing business, citing demand from small and large biotech customers.

Similarly, Lonza said its chemical and microbial had made progress, highlighting its recent antibody focused deal with Clovis​ – which will see it install a manufacturing line at Visp – as important.

The firm also said divesting its peptides unit to Polypeptides​ will allow it to focus on core activities.

Likewise, Lonza reported strong demand for the cell culture and transfection products made by its Bioscience Solutions business in 2016 compared with 2015.

Capsugel and 2017

Lonza also hinted its Pharma&Biotech segment will continue to grow in importance in 2017, citing the planned acquisition of contract capsule manufacturer Capsugel​ as a driver.

The firm said “Capsugel will accelerate growth and deliver value along the healthcare continuum by complementing our existing offerings and by opening up new market opportunities in the pharma and consumer healthcare and nutrition industries​.” The takeover is expected to close before July. 

Beyond Capsugel, Lonza predicted recent investment in single-use technology at its microbial manufacturing facility in Singapore and the acquisition of liver cell supplier Triangle Research Labs​ (TRL) will drive further growth this year. 

Lonza will hold its annual general meeting in April.

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