Lonza revenue growth can't protect Swiss plant from deeper job cuts

Swiss ingredient maker Lonza says its expansion in biologics manufacturing, including a new plant in the U.S., continues to build momentum and helped it realize revenue growth in the first half of the year. But costs at its massive operations in Visp, Switzerland, continue to be a drag and will result in the loss of more jobs there.

The drugmaker Wednesday reported revenues of CHF 1.9 billion, ($2 billion) for H1, as its specialty ingredient unit came through particularly strong. Revenues in pharma and biotech were up nearly 12% to CHF 754 million.

But the CDMO said that currency challenges make its site in Visp less competitive and so it will continue to automate there and make changes that will result in about 90 jobs being lost through natural attrition. It has put a hiring freeze in place for some areas. Lonza has added some capacities at the site, including in cell manufacturing, but it also has cut hundreds of jobs there over the last several years.

Lonza said that its growth in commercial biologics "over-compensated for the impact of restructuring activities in other areas." Lonza, like some other contract producers, is making a big push in biologics. It has been investing in its pharmaceutical manufacturing capacity and capabilities in areas like antibody drug conjugates (ADCs).

In June, it announced it would build a 100,000-square-foot facility in the Houston area that will double Lonza's capacity for the production of viral gene and virally modified cell products. The flip side of its efforts on biologics was its closure last year of a biologics plant in Hopkinton, MA, that had struggled with FDA issues that resulted in a warning letter in 2011. It laid off 250 people with the plant closure.

- here's the earnings release

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