Patheon having 'Banner' year, with boost from Latin America
Lots of drug companies have been pointing to growth in emerging markets as a bright spot in their earnings reports. Now, Patheon ($PTI) can not only say it has seen growth from investments in new markets, but that they provided it with a return to a profit, however small.
The Canadian firm last year paid $225 million for Banner Pharmacaps to gain a beachhead in Latin America. Banner is a gelatin capsules-and-coatings company based in Mexico. Patheon said Banner added nearly $55 million in revenue in the last quarter. That contributed to sales growth of 40%, which hit $254 million for the quarter.
The bottom line is $100,000 in earnings for the quarter, compared to a nearly $80 million loss in the same quarter a year ago and a $51.4 million hit last quarter after Patheon closed on the Banner deal.
Like other drugmakers, Patheon figures South America and other fast-growing emerging markets offer more opportunity than stagnant North America and Europe. Drugmakers from Big Pharma to much smaller have been striking partnership deals--and buying up drugmakers and consumer health companies--to capture a share of that growth. "We are certainly interested in India and China as well," CEO James Mullen said when the Banner deal was announced.
And while India and China have been good to some companies, Latin America, and Brazil in particular, has been the hot market of late. Companies like Merck ($MRK), Reckitt Benckiser and Daiichi Sankyo have moved in and old-timers like Sanofi ($SNY) and GlaxoSmithKline ($GSK) are beefing up there. Big Pharma reportedly is sizing up Brazil's Aché Laboratorios Farmaceuticos, for example. The story in Brazil, and much of Latin America, is similar to that in China and India. Pharma sales are benefiting from growing government expenditure on healthcare, a growing middle class able to foot the bill for treatments, and proliferating chronic diseases, such as diabetes and cancer. Brazil's retail pharmaceuticals market amounted to about $25 billion last year.
- here's the release
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