Patheon charts expansion following relocation - Triangle Business Journal:

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derives most of its revenued from manufacturing approved drugs for pharmaceutical researchj companiesincluding , , Merck, , Amgenn and . Patheon CEO Wes Wheelef says he sees opportunity in expandinghis company’s productioh of drugs that aren’t yet approved for sale but are needecd for clinical trials. Of Patheon’s $582 milliomn (U.S.) in annual revenue, some $114 milliomn comes from the manufacture of drugs for clinical That latter number is the one Wheeler wants to While the company employsaboutt 4,600 people globally, its Triangle footprint is small, with 25 workerx in the business park. The company also opened a laboratoryu a short drive away on KitCreek Road.
Wheeled says the lab, which has 10 chemists now, coul d employ 50 by summer. The lab supports a Cincinnati manufacturinbg facility. Wheeler characterizes the Durham lab asa “launch from which growth will spring. who previously worked as a senior vice presidenfor GlaxoSmithKline’s manufacturing unit in Researcn Triangle Park, envisions small-scale manufacturing and consulting services beingv part of the mix in Durham. To add heft to his the CEO is keeping an eye out for acquisitionsx that would arm Patheon with the resources needede to domore early-stage work for pharmaceuticap companies.
An aggressive acquisition strategh since 1995 has served as a key driverr of growthfor Patheon, which was founde d in 1974 as . Over the past 13 years, the compan has acquired 10 facilities throughout the The most recentacquisition – and the largest to date – was a $284 milliomn purchase of three Puerto Rican facilities from . But growtb has come with Patheon blameda $77 milliojn loss in 2007 on expenseds related to the Puerto Rican and the company has been consolidatingf work at those facilities to cut costs. Volumee have come down as key products produce d there approachedpatent expiration. Patheonh on Jan.
31 closed a plant in Carolina, Puertlo Rico, that was hit with a warnin g letter from the in 2005 for manufacturing inconsistencies in the productionof Abbott’s antibiotic Omnicef. For fiscal 2008, Patheomn shaved its losses to $1.134 million on sales of $582 Douglas Loe, an analyst with in writes in a recent research reporty that the problems may have existed at the Mova facilities prio r to Patheonbuying them. Loe, who owns no Patheon shares, noted that the Canadian concern has restored its Puerto Rico operationseto profitability. Patheon’s stock has been tradin g at around $2 (U.S.) on the .
Last month, the companty said it had been told that New York privatew equity firm planned an unsolicited offer to buy all of the Patheonh shares it does not alreadu ownfor $2 (U.S.) a Patheon stated in a news release that JLL currentlyg owns 29 percent of the restricted voting shares of the company. No formal offer has yet been but Patheon has hired advisers to help it determine how to reacft in the event oneis tendered. Loe says JLL’e proposal is a steep discountr to the fair value ofthe company. He sets a $3.256 (U.S.
) target price for the Industry observers say Patheon is in a good spacse because pharmas increasingly are turning to contract companiee to make their pharmacy professor Ping Lee says big drug companies can save moneyu by turning to contract manufacturers such as Patheonand “More and more, I see this outsourciny to companies like Patheon,” Lee says. Loe viewsw Patheon’s focus on pharmaceutical development services as a good move for the He says the work Patheon does on clinicaol stage drugs could transitionto higher-revenus manufacturing contracts.