Lonza Sees Strong CDMO Demand and Projects 20% Sales Growth for 2025
Despite a 2.1% decrease in annual sales to USD 7.2 bn in 2024, Lonza CEO Wolfgang Wienand highlighted strong demand for its CDMO services, combined with the high volume of contracts - including two customer contracts at its new acquired large-scale mammalian production facility in Vacaville, California.
Looking ahead, the company projects a 20% sales growth for 2025, with anticipated profit margins around 30% in its CDMO business. Lonza will continue to implement its recently announced “One Lonza” strategy, as it looks to divest its Capsules & Health Ingredients division to focus on its position as a leading CDMO.
The following article originally appeared in Fierce Pharma.
Although Lonza posted slightly lower sales than analysts had expected in 2024, the Swiss CDMO suggested in its year-end report that it's in a stronger position going into 2025 thanks to improved performance in some sectors.
The company reported 2024 sales of 6.57 billion Swiss francs ($7.24 billion), down 2.1% from 6.71 billion Swiss francs in the previous year.
Analysts had expected 6.62 billion Swiss francs in full-year 2024 sales, according to a note from ODDO BHF.
High demand for Lonza's CDMO services helped the company deliver core earnings of 1.9 billion Swiss francs ($2.1 billion), the company said in its Jan. 29 report.
Strong performances in Lonza's mammalian, bioconjugates, small molecules and cell and gene technologies businesses helped offset some COVID-19-related declines, according to the company. Besides the COVID slowdown, the company's capsules operation experienced "lower market demand" and its bioscience business experienced "softness," the company added.
Lonza's highlights last year included contract signings valued at 10 billion Swiss francs ($11 billion) and the completion of its purchase of Genentech’s large-scale mammalian production facility in Vacaville, California, from Roche. After closing the Vacaville site buy in October, Lonza has signed two new customer contracts at the facility, the company said.
Looking ahead, Lonza's guidance for 2025 calls for 20% sales growth. In its CDMO business, the company expects profit margins to land at around 30% for the year.
“In 2024, our market-leading CDMO businesses demonstrated good commercial momentum with high contract signings across technologies,” Wolfgang Wienand, Ph.D., Lonza’s chief executive, said in the release. “Looking ahead to 2025 and beyond, we are focusing on implementing our One Lonza strategy and a simplified, easy-to-scale organizational structure.”
Lonza launched its One Lonza strategy during an investor update in mid-December. The plan calls for a restructuring and reorganization of its CDMO business plus efforts to “elevate” engineering and grow the company's production footprint.
Lonza also said it plans to hive off its Capsules & Health Ingredients unit “at the appropriate time.”
The company's full-year results “essentially confirmed the momentum of the first half of 2024, with a strong CDMO business, especially in the Biologics and Small Molecules divisions as well as major headwinds in CHI (capsules and Health ingredients), which will be divested in the future,” ODDO BHF analysts wrote in a note to clients this week.
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