Novasep's 'focus' pays off for contract manufacturer

Novasep's Omega 3 plant--Courtesy of Novasep

Getting focused has been the catchphrase of the pharma industry for a couple of years and its reach includes contract manufacturers no less than the Big Pharma players. French CMO Novasep said today that its "back to basics" strategy, which included some changes in its manufacturing network, has paid off with improved financials.

The Lyon-based company reported that its 2014 sales of about €250 million ($268 million) had produced an EBITDA sales margin of 11%, up from 8.5% the preceding year, which it pegged to a "successful cost control strategy."

Among the highlights of the year, Novasep said in a statement, was the completion of a €28 million omega-3 unique purification facility in Mourenx, France. Novasep says the facility is the world's largest chromatography platform for omega-3 and polyunsaturated fatty acids purification.

It also sold off its Pharmachem business in the Grand Bahamas to a local investor, which it says improved its cash flow by €30 million. Novasep had bought Pharmachem in 2007 to be closer to U.S. customers, but said the single product manufactured there was nearing the end of its life cycle while the manufacturing capabilities of this facility no longer fit into its game plan.

"The positive market context and increased financial resources available to us since the sale of Pharmachem will contribute to our sales momentum in 2015," CEO Michel Spagnol said in a release.

There has been a significant amount of expansion in the CMO ranks, both organically and through M&A, as companies try to position themselves as having specialized capabilities but global reach to attract the attention of Big Pharma. U.S.-based Patheon, for example, last month said it would buy contract manufacturer IRIX Pharmaceuticals to get its expertise in making difficult APIs, then a week later snapped up Agere Pharmaceuticals, a Bend, OR-based specialist in bioavailability.

- here's the announcement (PDF)

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