|AMRI CEO William Marth|
Contract drug developer AMRI ($AMRI) turned in a stagnant revenue quarter, watching profits slip as it prepares to shake off its dependence on royalties and embrace a future in large-scale manufacturing.
The Albany, NY, company brought in revenue of $59.3 million in the first quarter, essentially unchanged from the same period in 2013. AMRI's contract services sales jumped 10% to $51 million on the quarter, but the company's royalty revenue, tied largely to Sanofi's ($SNY) Allegra, fell a worse-than-expected 36% to $8.3 million. Net income dipped about 46% to $3.5 million.
On a segment basis, AMRI's banner large-scale manufacturing business again led the way, growing 19% to post $31.5 million in sales, while its discovery and development unit fell 3% to $19.5 million.
AMRI has long since seen the writing on the wall with its businesses' performances, and the company's future plans center on bolstering what it does well and cutting back where it could use some help. Last month, the contract developer spent $41 million to acquire manufacturer Cedarburg Pharmaceuticals, a deal it expects to add about $14 million on 2014's revenue. At the same time, AMRI revealed 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.
Now, with its plan in place, AMRI is raising its expectations for 2014, forecasting contract revenue growth between 16% and 20% and an earnings per share boost of 11% to 20%, CEO William Marth said.
"Strong organic growth in our contract business and recent restructurings will continue to drive the contract business to be more profitable, furthering our continued goal of reducing dependency on royalty revenue," Marth said in a statement.
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