DSM sees green shoots for pharma unit in Q1
pharmafile | May 8, 2012 | News story | Business Services, Manufacturing and Production, Sales and Marketing | DSM, Kensey Nash, NSCLC, Q1, Sinochem
DSM said its pharmaceutical business unit posted ‘weak’ financials in the first quarter of 2012, although revenues rose and there are some signs of improvement in the market, according to the company.
The Dutch life sciences firm said pharma sales growth by volume was 19% in the quarter, with overall revenues rising 7% to €175 million.
This was mainly due to better performances at contract manufacturing division and active pharmaceutical ingredients (API) supplier DSM Pharmaceutical Products, which was boosted in the quarter by an extended contract from Agennix to manufacture non-small cell lung cancer (NSCLC) treatment talactoferrin.
Also driving the growth were price increases at the recently-launched anti-infective ingredients joint venture DSM Sinochem Pharmaceuticals, which was formed in 2010 when China’s Sinochem took a 50% stake in DSM Anti-infectives. The net effect of the creation of DSM Sinochem was negative however, as the 50% deconsolidation of revenues impacted the division’s figures.
Across all its divisions, DSM posted €306 million in operating profit in the quarter on sales, down 6%, on sales up 3% to €2.29 billion.
DSM has been planning to expand its pharmaceuticals business globally via a series of international partnerships, and earlier this year signed an agreement with India’s Indoco Remedies that would allow it to sell eight of the latter’s APIs around the world.
The first quarter also marked a return to operating profit for the pharmaceutical division, at €5 million versus zero a year earlier. Profit was also boosted by DSM’s decision not to divest its maleic anhydride and derivatives business, which had been up for sale.
The group also took a major step towards boosting its biomedical presence with the announcement last week of a $350 million agreement to acquire Kensey Nash, which specialises in biomaterials used for tissue repair and regeneration.
Once completed, the acquisition will help DSM in its bid to grow its biomaterials division into a €1 billion business, across biomedical as well as bio-industrial applications such as biofuels.
Phil Taylor
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