Acquisitions and cost cutting initiatives pay off for AMRI in Q2 2015

Revenue increased by 31% to US$89.5m

Cost cutting exercises helped boost revenue at AMRI in the second quarter to 30 June 2015, while recent acquisitions are promising a strong contract manufacturing performance going forward.

The US contract research and manufacturing organisation bought two Aptuit facilities in Glasgow, Scotland and West Lafayette, US in January and after the end of the period in July added Gadea Pharmaceuticals.

Total revenue for the second quarter of 2015 was $89.5m, an increase of 31% compared with $68.2m for the same period in 2014. Contract revenue rose 39% to $85.2m.

'We are very pleased to present another strong financial quarter, with all our divisions achieving excellent results,' said William Marth, AMRI's President and Chief Executive. 'Notably, recent acquisitions, combined with the cost reduction initiatives and efficiency efforts we've made to date, are contributing to continued strong contract margin performance.'

Royalty revenue in Q2 declined by 36% to $4.3m, due mainly to lower royalties on Allegra (fexofenadine) products. The company earned $1.8m of royalties from the fexofenadine products and $2.5m from the net sales of certain amphetamine salts sold by Allergan (formerly Actavis).

Net income on an adjusted basis in the second quarter was $7.4m compared with $7.2m for 2014.

Total revenue for the six-months to 30 June was $171.4m, up 34%. Contract revenue for the same period was $160.4m, an increase of 43%. Royalty revenue in the first six months of 2015 was $11m, a drop of 27% due primarily to lower royalties on Allegra (fexofenadine) products. Net income on an adjusted basis was $13.8m, compared with adjusted net income of $12.3m in 2014.

Marth said the addition of Spanish company Gadea Pharmaceutical Group will significantly expand the company's capabilities in technically complex active pharmaceutical ingredients and allow it to expand into many new markets.

He added that the company remains confident that the positive trends will continue in the second half of the year.

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