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20 Jul 2016

Lonza reports best first half in history with continued strong momentum

Pharma&Biotech’s outstanding operational performance across all assets bolstered the strong half-year results.

In the first half of 2016, Lonza’s Pharma&Biotech and Specialty Ingredients segments both delivered a strong and improved performance and are on track to meet their growth targets for the year. Compared with the same period in 2015, Lonza recorded sales growth of 6.0% to CHF 2,019 million and CORE EBIT growth of 20.0% to CHF 312 million in reported currency. The improvements came from better operational and commercial performance. Net debt was further reduced by CHF 337 million.

“Specifically our Pharma&Biotech segment delivered outstanding operational performance across all of our assets. We are harvesting the fruits of our diligence in implementing productivity programs, as well as the stringent portfolio management activities in Specialty Ingredients and the favorable market environment,” said Richard Ridinger, CEO of Lonza. “These strong half-year results have pushed us to an intermediate sprint towards our ambitious targets and have made us very confident that we will reach our mid-term goals.”

Pharma&Biotech substantially increased sales and CORE results compared with the same period last year. The great performance throughout the first half was mainly driven by the excellent operational performance of the segment, a strong momentum in the mammalian business, a generally solid market demand and ongoing cost discipline. Also the made-to-stock Bioscience Solutions business delivered strong growth in both sales and profits.

All biological technologies experienced positive growth momentum. The outsourcing trend is persisting, as evidenced by the fact that in 2016 Pharma&Biotech will provide drug substances for 20 commercial biologics. This outsourcing trend should continue to increase in the future.

As part of the growth strategy, Lonza complemented its primary-cell offering with the acquisition of Triangle Research Labs, a hepatocyte provider based in North Carolina (USA) during the first half of 2016.

Emerging Technologies also experienced strong growth momentum and took a leading role in setting a platform to bring new technologies to commercial scale during the first half of the year. One example is the long-term commercial partnership with bluebird bio, Inc., a clinical-stage company committed to developing potentially transformative gene therapies for severe genetic diseases and T cell-based immunotherapies for cancer.

With this positive first half of 2016 and the good momentum expected to continue into the second half of the year, Lonza is raising its guidance for CORE EBIT growth and now expects a double-digit improvement in CORE EBIT for the full year of 2016.

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