While the company expects sales growth to be flat this year, Lonza’s shares jumped around 14% Friday morning after reporting full-year 2023 sales of $7.75 billion, which was 3% above the consensus.
Pictured: A Lonza manufacturing facility in Pearland, Texas/iStock, JHVEPhoto
After a rough 2023 for contract development and manufacturing organizations, Lonza is projecting flat sales for this year. The Swiss manufacturer also announced Friday it would be closing another biologics facility in China.
While 2024’s CER sales growth is expected to stay flat, the company confirmed its mid-term guidance for 2024-2028 at 11% to 13% sales growth. The projected EBITDA margin in the high twenties is on par with last year’s margin of 29.8%.
Lonza’s shares jumped around 14% Friday morning after the company reported full-year 2023 sales of $7.75 billion, which was 3% above the consensus estimate. Lonza closed out 2023 with a 7.9% sales revenue increase compared to the prior year.
However, 2023 was a choppy year for Lonza. In July, the company decreased its outlook from “high single-digit” to “mid-to-high single-digit” sales growth, citing lower growth in early-stage services due to biotech funding restraints and a drop in the demand for nutraceutical capsules. Two months later, its CEO departed and Moderna announced a ramp-down of production of the mRNA drug substances for its COVID-19 vaccine, which was produced at Lonza’s Visp, Switzerland site.
To try and optimize its biologics network, Lonza is closing the doors on two manufacturing facilities—Guangzhou in China and Hayward, California. Closures will begin this quarter and be completed by the beginning of 2025. The company reported impairment loss of $2.12 million, combined with restructuring-related costs of $58 million.
Industry experts are expecting the CDMO business to see some bright spots in 2024, following a tough 2023. Gil Roth, president of a CDMO trade group told BioSpace that large and small pharma companies still need to work with CDMOs to bring their therapies to fruition, particularly as the number of approvals is anticipated to tick up.
Last week, CDMO Bora Pharmaceuticals made another move into North America. The Taiwanese manufacturer scooped up Minnesota-based generics producer Upsher-Smith Laboratories in a $210 million acquisition.
Kate Goodwin is a freelance life science writer based in Des Moines, Iowa. She can be reached at kate.goodwin@biospace.com and on LinkedIn.
