AMRI snags drug development deal with U.K. government

AMRI ($AMRI) has signed a long-term contract with the U.K.'s defense department, agreeing to take an investigational drug to Phase I with a chance to re-up once there.

Under the 7-year deal, AMRI will develop and scale up an undisclosed therapy, manufacturing doses for a Phase I study, and, if all goes well, AMRI will "be in a strong position" to pick up a CMO deal after the trial, the company said. Neither side disclosed financial details.

While working with governments is a bit outside the contract pharmaceutical development on which AMRI made its name, the company has found some success in public-funded projects, in 2011 signing a 5-year, $43 million discovery deal with the NIH.

Plus, as CEO Thomas D'Ambra notes, the company is happy to expand its market reach.

"Government contracts and related collaborations outside of our typical outsourcing contracts with biotechnology and pharmaceutical companies are part of our strategy to diversify our revenue base while making our high-quality services available to all industries, sectors and organizations that can benefit from our strengths in discovery, development and manufacturing," D'Ambra said in a statement.

Last month, D'Ambra announced that he would retire from his post after 22 years at AMRI, leaving behind a company in transition. The Albany, NY, outsourcer is still recovering from restructuring charges and facility costs that pushed it to a $2.2 million net loss last quarter, but AMRI has strung together three consecutive quarters of revenue growth on the strength of its burgeoning large-scale manufacturing business.

The company is expecting up to $213 million on the year, good for 12% growth.

- read the announcement