Patheon finally turns a profit after $255M Banner deal

Patheon CEO James Mullen

Canada's Patheon ($PTI) is creeping back toward profitability after sinking $255 million into Banner Pharmacaps, and the company eked out some net income growth last quarter thanks to a huge revenue spike.

Patheon reported $100,000 in profits for Q2, beating out a $79.6 million loss in the same period last year and a $51.4 million negative last quarter. The contract development and manufacturing outfit credits a 39.9% jump in revenue, which reached $253.9 million on the quarter thanks in part to products and services it acquired in the Banner deal. Banner pitched in $54.6 million in sales for the quarter, while Patheon's original business grew 9.9%.

Buying Banner, a heavyweight in softgel manufacturing, brought Patheon four new plants and about 1,200 employees. CEO James Mullen said the acquisition will boost Patheon's visibility in the industry and help it cross $1 billion in annual revenue this year.

"We continue to see robust growth and improved performance in the legacy Patheon business, and the Banner integration is nearing completion," Mullen said in a statement. "Our transformation initiatives have yielded strong results and we are continuing these operational excellence activities across the network, including at the newly acquired sites."

Patheon's contract manufacturing again led the way in Q2, growing 49.3% to $219.5 million while the company's drug development business stayed about flat at $34.4 million. The middling development sales come as Patheon is transitioning away from that segment, last year selling off its secondary clinical packaging and clinical distribution services business after failing to find a buyer for a Swindon, U.K., plant.

- read the full results

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