Quarterly and annual reports from the handful of publically-traded fine chemicals firms do not entirely coalesce as a neat narrative. They do, however continue to reflect a steady rebound from the sector’s post-recession bottom in 2010. Ampac Fine Chemicals, a division of American Pacific, reported a 55% increase in revenues on undisclosed sales in the first quarter of fiscal 2012, which ended on December 31, 2011. Revenues increased to $21.5 million compared to $13.9 million in the first quarter of 2011. This reduced operating loss from $3.6 million in the first quarter last year to $1.2 million. Ampac attributes this reduction to an increase in production volume and improved gross profit. “Ampac continues to implement process improvements which are designed to increase manufacturing throughput rates and lower unit production costs,” the firm said in its earnings release. Sales at Cambrex for the fourth quarter of 2011 reached $67.1 million, 5.7% over the same period in 2010. The company attributes the gain to increased demand for an API manufactured under a long-term supply contract, as well as a recent customer product approval and higher generic API sales. Increased business in controlled substances also lifted results. The two Swiss companies in the group, Siegfried and Lonza, have published their annual results. Seigfried reported a 4% increase in sales in 2011 to $361 million. The company charted net profits of $10 million. Seigfried says it achieved growth in both exclusive synthesis and in the production of active ingredients in its generics portfolio. The year marked a return to profitability for the company, which, after two years of not paying a dividend, is proposing a $1.1 (1 Swiss franc) per-share dividend. At Lonza, which made a major investment in acquiring specialties firm Arch Chemical last year, results are reported before and after the acquisition with sales at $2.8 billion before and $3 billion after. The firm reports profits of $209 million after the acquisition. Lonza, which fired CEO Stefan Borgas earlier this year, boasts of establishing itself as a clear global leader in microbial control, with the acquisition of Arch, and custom manufacturing, where it delivered sales growth despite challenges such as the strong Swiss franc and higher and more volatile raw material prices. As  suggested in Cambrex’s breakdown, success in this sector is often tied to one or a few major contracts. There is still a lot of shuffling in the landscape, as drug companies bring business back from Asia and continue to evolve from in-house to outsourced API production. But overcapacity continues to cloud the view going forward. Next stop, the annual DCAT dinner on March 15 in New York City—Deal-making Central in the suites of the Waldorf Astoria. We will see how the results above stack up with those shared by the many privately-held firms in the business. This year’s headliner, former U.S. president George W. Bush, joins the coterie of top-dollar speakers, including former president Bill Clinton and former Duchess of York Sarah Ferguson (and former California governor Arnold Schwarzenegger), who have captivated the gathering in years past. Apparently W. is a big draw for this crowd, as the tables appear to be sold out!

Author: Rick Mullin

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  1. Isn’t DCAT the biggest fancy pants dinner in all of NYC?

    • You are correct.