CRO AMRI Restructures and Cuts Jobs as Result of Euticals Acquisition
August 30, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Contract research organization (CRO) Albany Molecular Research (AMRI), headquartered in Albany, New York, announced that it will be restructuring specific operations in the U.S. and Europe. An unspecified number of jobs will be cut as a result.
The restructuring is the direct result of the recently closed acquisition of Prime European Therapeuticals, also known as Euticals. Euticals, headquartered in Lodi, Italy, specializes in custom synthesis and the manufacture of active pharmaceutical ingredients (APIs). That acquisition will make AMRI one of the largest independent developers and suppliers of API in the industry.
“This significantly expands AMRI’s customer base, further diversifies our revenue streams, and moves us significantly closer to our goal of reaching $1 billion in annual revenues by 2018,” said William Marth, AMRI’s president and chief executive officer, in a July statement. “The Euticals acquisition accelerates our company’s strategy to become a global, preeminent provider of contract research, development and manufacturing services to the pharmaceutical industry, while at the same time enhancing our ability to expertly serve our customers.”
As part of the restructuring plan, AMRI expects one-time cash and non-cash charges related to the workforce reduction and other transition activities to be between $5.8 and $7.3 million. That will also include non-cash fixed asset impairment charges of about $0.06 million related to the shuttering of a Euticals location and non-cash share-based compensation modification charges equaling about $0.16 million.
AMRI expects that cash charges of about $5.5 to $7.1 million of employee and other costs will be paid in the second half of this year.
At the company’s second-quarter financial report on Aug. 4, AMRI indicated contract revenue for the quarter of $116.5 million, up 37 percent from the same period in 2015. Its recurring royalty revenue was $4.4 million. Contract margins were 29 percent in the second quarter compared to 24 percent in the second quarter of 2015.
Total revenue for the six-month period that ended June 30 was $226.4 million, up 32 percent from the same period last year.
The company’s guidance took into account the acquisition of Euticals. The company projects full-year revenue of $590 to $615 million, with incremental revenue from Euticals being about $123 million.
“Solid execution of our strategy resulted in a successful quarter with strong revenue driven largely by the contributions of our acquisitions and strong performances in our commercial operations,” Marth said in a statement. “Higher margin businesses such as Whitehouse Labs and Gadea, as well as strong results in our DDS and Drug Product businesses significantly enhanced our performance this quarter. We are confident that our plan will enable us to meet our outlook for the full year 2016, especially with the addition of Euticals, which brings us compelling strategic benefits and adds to our ability to generate meaningful value for our customers and shareholders longer term.”