Contract developer AMRI ($AMRI) has closed its $110 million acquisition of drug manufacturer Oso Biopharmaceuticals, its second deal this year and one the company believes will help pad its annual revenue.
Oso, based in Albuquerque, NM, specializes in making small-molecule drugs and biologics, AMRI said, dovetailing with the company's fast-growing large-scale manufacturing business. Oso had projected 2014 sales of up to $60 million, and AMRI figures it can squeeze out about $3 million in cost synergies this year now that the deal is complete.
AMRI's initial expectation for 2014 was up to $253 million in contract revenue, good for 20% growth, and now the company plans to revise that guidance upward next month when it divulges its second-quarter results.
The deal comes on the heels of AMRI's $41 million buyout of contract manufacturer Cedarburg Pharmaceuticals in February. Both acquisitions fit within AMRI's renewed focus on manufacturing as it moves away from its old reliance on royalties. After posting a string of quarterly losses last year, AMRI has since soared on high demand for its large-scale manufacturing services.
ARMI is working to wean itself off royalty revenue, tied largely to Sanofi's ($SNY) Allegra, and maximize its strengths in manufacturing. In April, the Albany, NY, company disclosed plans to shutter a Syracuse facility focused on early-stage services, looking to save about $1.5 million a year after it takes a charge of up to $6.5 million tied to the move.
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