Patheon reveals strategy amid poor financials

James Mullen, the former CEO of Biogen Idec ($BIIB), is facing some new challenges at the helm of contract manufacturing outfit Patheon ($TSX:PTI). Mullen, who stepped up as CEO and president in February--following a rocky end to his tenure at Biogen last year--appears to be revamping the CMO's strategy amid some lackluster financial results for the third quarter.

The "new corporate strategy," described in the third-quarter financial report, puts "an initial heavy focus on strengthening the company's core operations." It also refers to a review of its global footprint to improve capacity utilization; reorienting existing commercial sites to focus on specific technologies or production types; and "investing in and expanding its presence in early drug development services." (Patheon makes supplies of experimental drugs for developers which test them in clinical trials.)

The strategic changes come with some poor financial results: a $3.2 million loss from continuing operations, compared with $1 million a year ago. Revenue was up, however, by 6% over a year ago. Also noteworthy is the company's third-quarter corporate costs of $8.9 million, up from $5.5 million a year ago, attributed mostly to "higher consulting fees related to the strategic and operational review as well as higher compensation expenses."

- here's the Patheon release
- see this story
- here's Reuters' take