Patheon posts Banner quarter on 30% sales surge

Patheon CEO James Mullen

Canadian contract manufacturer Patheon ($PTI) is still reaping the benefits of its high-dollar buyout of Banner Pharmacaps, wrapping up the integration process and reporting a 30.4% leap in quarterly profits.

In its fiscal Q3, Patheon posted $265.7 million in revenue with about $66.4 million coming from Banner alone, and the acquisition more than accounted for the year-over-year growth. The company swung to a profit for the second straight quarter, but its $4.3 million in net income came in well below the $15.5 million it hauled in last year.

Patheon's commercial manufacturing business grew 35.4% to $227.8 million on the quarter, fueled by Banner's business, while the company's smaller pharmaceutical development unit grew 7.1% to $37.9 million.

The $255 million Banner deal, announced last fall, was designed to make Patheon a global force in softgel manufacturing, bringing in four new plants and about 1,200 employees. With all that added capacity and capability, Patheon is projecting to cross the $1 billion revenue mark this fiscal year, CEO James Mullen said, and the latest quarterly results only bolster that expectation.

"The integration of Banner is complete, and our transformation initiatives continue to yield results as we implement operational excellence activities across our global network," Mullen said in a statement. "Overall, revenue flow across quarters has been more balanced this year, and we are encouraged by this continuing trend."

Last year, Patheon sold off its clinical packaging business and vowed to focus on its fast-growing contract manufacturing arm. Since then, the company has put together successive quarters of profit growth after months of deepening losses.

- read Patheon's results