Wait until the second half of the fiscal year. That was part of Patheon ($PTI) CEO Jim Mullen's message after the contract drugmaker reported a $20.9 million operating loss for the first quarter of fiscal 2012. The loss comes amid the turnaround that Mullen, the former chief of biotech giant Biogen Idec ($BIIB), has spearheaded since taking the helm at Patheon last year.
The company's quarterly revenue dropped from $175.7 million to $153.9 million, a $21.8 million decrease that management blamed on the loss of a manufacturing contract last fiscal year, which ended Oct. 31. Within the operating loss for the first quarter was a big $6.4 million expense for consultants, who Mullen has tasked with aiding his effort to remodel Patheon's business to boost its focus on development services.
Indeed, Toronto-based Patheon boosted revenue from development services from $4.1 million to $31.1 million in the first quarter of fiscal 2012--a bright spot in an otherwise gloomy and loss-making picture presented in the company's quarterly financial report. Mostly because of the loss of the major contract, the company's commercial manufacturing revenue dropped from $148.7 million to $122.8 million, the company reported.
Mullen appeared to do his best to sell investors on the merits of his spending on consulting that, for now, lives in the loss column.
"The transformation activities are on track as we continue to improve efficiencies and productivity at the site level and in our general and administrative, pricing and procurement functions," Mullen said in a statement. "In the second half of our fiscal year, consulting costs related to implementing our transformation program should decline and we anticipate recognizing real cost savings from our initiatives. Top line growth together with improved performance should deliver improved financial results in the future."
- here's the release
- see Outsourcing-Pharma's report