Lonza forecasts $7.9B in annual revenues by 2022, helped by Capsugel buy

Lonza forecasts $7.9B in annual revenues by 2022.

Swiss CDMO Lonza forecast in its half-year earnings report it will produce about $7.9 billion in annual revenues by 2022, strengthened by the recent purchase of Capsugel.

The company also noted its new Visp-based Ibex manufacturing service as an additional boost to the earnings forecast.

The blockbuster $5.5 billion deal for Capsugel, a U.S.-based contract capsule and drug producers, was announced late last year and closed in the second quarter of this year. Lonza bought Capsugel from KKR. The deal included refinancing $2 billion in Capsugel debt.

At the time, Lonza said the purchase would be accretive from the start and eventually provide about $100 million in savings through cross-selling opportunities and by combining manufacturing and services.

“Lonza’s continued growth shows the company’s strength and ability to shape the future along the healthcare continuum with our customer-oriented market approach, ongoing operational excellence and new innovative offerings,” Richard Ridinger, Lonza’s CEO, said in a statement. “The outstanding results in the first half 2017 are fully consistent with our outlook for the full year.”

For the first half of 2017, the company reported a 15% increase in revenues to $2.4 million while operating earnings grew 43.3% to $470 million. The company’s pharmaceutical and biotech segment jumped 27% to $1.12B versus the same period last year, and the unit recorded operating earnings—core EBIT—that soared 71.7% to $287.1 million.