While biologics remains “the growth engine" for Lonza, the CDMO hopes to mitigate “margin pressures” within its CGT business in 2024.
Swiss contract development manufacturing organization (CDMO) Lonza’s sales stood at CHF 6.7 billion ($7.7 billion) for 2023, corresponding to a growth of 11% year-on-year.
However, profits declined 46% to CHF 655 million with management attributing this to a high base in 2022 from divestment gains and from depreciation in 2023 — specifically the closure of two sites in Guangzhou, China and Hayward, California, along with the termination of its contract with Moderna last September.
However, while its cell and gene business also saw double-digit growth, Lonza reported a “mixed performance” with flat underlying sales. In its financial call CFO Philippe Deecke said he was looking to 2024 to mitigate “margin pressure in Cell & Gene Technologies with commercial initiatives to increase sales and operational improvement programs and cost control initiatives across the network.”
He pointed to funding constraints driven by customer prioritization and delays in clinical programs, but the cell and gene business was buoyed by customers approvals in the space.
“We have supported the commercial launch of two new customer products in 2023 meaning that we now support a total of three commercial products,” Deecke said. One of these is Vertex’s cell therapy pipeline targeting type 1 diabetes, approved in June.
The business is likely to bloom as more customer projects reach approval, and interim CEO Albert Baehny told stakeholders three to four new therapies could reach commercialization in 2024.
“[These] will facilitate improving the stability of our sales and our margins, but these three to four therapies are expected to be approved by the end of the year. So, the impact on 2024 will be limited but important in 2025, if they are successful.”
You May Also Like
