Sector News

Lonza, busy with capacity upgrades and exec turnover, hints at CDMO industry rebound

May 17, 2024
Life sciences

A tough biotech funding environment and a downturn in COVID-related contracts has weighed heavily on CDMOs of all stripes in recent years. Now, with a new CEO waiting in the wings, Swiss manufacturing juggernaut Lonza is attempting to reassure the market that an industry stabilization is on the horizon.

Despite “softer” sales over the first three months of 2024, Lonza remains confident that its performance across the first half of the year will improve to align with its full 12-month trajectory, the company said in a quarterly update Tuesday. The company did not provide specific sales numbers for the quarter but instead gave a “qualitative” update to the market.

The contract manufacturer confirmed its guidance for the full year, over which it expects flat sales at constant exchange rates. The firm generated 6.7 billion Swiss francs ($7.39 billion) in 2023, a 10% increase from the prior year.

For the first quarter, Lonza says it enjoyed sustained demand for commercial-stage projects and cited “initial signs” of an industry recovery for early-stage work.

Performance aside, Lonza said it’s continuing to plow ahead with a number of growth projects. The company pointed to its upcoming large-scale mammalian drug substance and highly potent active pharmaceutical ingredient facilities in Visp, Switzerland, which are expected to kick off operations in 2024’s fourth quarter. Lonza added that construction is on track at its large-scale commercial drug product facility set to come online in Stein, Switzerland.

The company also reiterated investment and expansion plans for the massive Roche plant in Vacaville, California, it acquired for $1.2 billion back in March.

“Looking at our industry fundamentals, we remain well-positioned to capture value by maintaining our focus on growing our commercial offering, while managing our costs and maintaining our focus on operational excellence,” Albert Baehny, Lonza’s interim CEO, said in a statement.

Baehny is due to step down from his temporary leadership post this summer, as Lonza’s next full-time helmsman, Wolfgang Wienand, comes over from the CDMO’s Swiss compatriot Siegfried.

Baehny, Lonza’s chairman, stepped in to help fill the CEO role in October after former Lonza leader Pierre-Alain Ruffieux abruptly left. Earlier this month, Jean-Marc Huët was elected as Chairman of the Board of Directors at Lonza’s Annual General Meeting, succeeding Baehny.

The appointment follows years of leadership instability marked by multiple CEO handovers since Richard Ridinger left in early 2019.

Meanwhile, Lonza is far from the only CDMO hoping for an industry rebound. Many contractors, from WuXi Biologics to Germany’s Merck KGaA, have opined on the tough environment for manufacturers in recent years.

Just last week, AGC Biologics telegraphed layoffs of just under 4% of its global workforce, with its parent company AGC Inc. citing the “disappearance of COVID-related special demand” and “reduced capital inflows into biotech ventures” as potential limiting factors in the life sciences field.

At the time, AGC Inc. acknowledged that the business environment was recovering while stressing that the “recovery pace requires close monitoring.”

Editor’s note: This story was updated to note that Jean-Marc Huët was elected as chairman of Lonza’s board of directors earlier this month.

By Fraiser Kansteiner


comments closed

Related News

June 16, 2024

Bayer’s biotech head Jens Vogel says good-bye after 4 years

Life sciences

While Vogel didn’t cite any broader organizational changes as the reason behind his resignation, his departure comes amid a heavy-handed restructuring at the German pharma. Back in January, Bayer unveiled plans that have ultimately led to the elimination of more than 1,500 roles in the first three months of 2024.

June 16, 2024

Ventilator maker Vyaire Medical files for bankruptcy

Life sciences

The global ventilation and respiratory device manufacturer—originally spun out as a joint venture between BD and Apax Partners in 2016—said its decision followed “below-plan performance in the first half of the financial year, which frustrated efforts to refinance company debt,” and that Vyaire will remain open for business in the interim.

June 16, 2024

Pfizer, Flagship name first target for multibillion-dollar collaboration: obesity

Life sciences

Pfizer and Flagship Pioneering have settled on the first target for their billion-dollar, multiprogram collaboration, and it’s not exactly a surprise: The New York Big Pharma giant will work with the venture creation firm’s ProFound Therapeutics to develop new obesity drugs.

How can we help you?

We're easy to reach