Cambrex ponies up $50M for another expansion of its Iowa API plant

With revenues, earnings, and demand for active pharmaceutical ingredients (APIs) on the upswing, U.S. contract manufacturer Cambrex is ready to again expand a plant in Iowa. It will invest about $50 million for manufacturing and warehouse operations there and also plans to put money into sites in Sweden and Italy.

The East Rutherford, NJ-based Cambrex plans to initially add a total of 70 cubic meters of glass-lined reactors to its Charles City, IA, facility, but it is being designed so that it could quickly be enlarged. It will also add 45,000 feet of warehouse space. The company said it expects the project to be complete next year. According to the Des Moines Register, Cambrex will get about $1.5 million in state incentives for the project, in exchange for which it says it will add 32 jobs.

Cambrex CEO Steven Klosk

"We are significantly expanding our facility in Iowa to facilitate expected strong demand for large-scale cGMP capacity and are also investing in our Swedish and Italian sites," CEO Steven Klosk said in an earnings release Friday. The company reported large jumps in sales and earnings for the fourth quarter and the year, with Q4 revenues up 25% to $129 million and adjusted EBITDA of $34.4 million, a 55% jump. It said it expects revenues this year to grow 16% to 20%.

In 2012, Cambrex invested close to $20 million to boost capacity at the Iowa plant, helped by $400,000 in state incentives in exchange for promising to add about 60 positions in three years to the 215 it already had. That project, which took about 10 months to build, was completed in 2013.

Contract manufacturing has been expanding as some Big Pharma players have cut back their own manufacturing operations even as they are pushing products through their pipelines. French contract manufacturer Novasep, for one, received FDA approval last year for an expansion of its highly potent API manufacturing operations at its plant in Le Mans, France. The company invested €4 million ($5.5 million) to boost commercial-scale capabilities for extremely potent antibody-drug conjugate manufacturing.

- here's the expansion announcement
- here's the earnings release
- read the Register story