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| AMRI CEO William Marth |
Earlier this year, AMRI ($AMRI) paid $110 million for injectable drug specialist Oso Biopharmaceuticals Manufacturing, expecting to make some extra money in its contract manufacturing operations. Instead, a power loss at that company's facility in New Mexico was a big factor in it reporting a loss in the last quarter.
"A weather-related power interruption at our OsoBio facility in Albuquerque took the facility offline for a period of time, contributing to the loss of finished product and the need to remediate one of the suites at the facility," AMRI CEO William S. Marth, said as the company reported an $8.6 million Q3 loss. "Costs associated with this activity--together with facility downtime--increased our operating costs and contributed to the quarterly earnings loss."
There were other issues also playing into the loss, Marth said, like lower active pharmaceutical ingredient sales.
When AMRI completed the OsoBio buyout in July, it said it had expected the deal to add to its contract work and so its earnings this year. The acquisition of OsoBio was its second this year. In February it paid $41 million for contract manufacturer Cedarburg Pharmaceuticals. The deals were key to AMRI's plan to move past its reliance on royalties tied largely to Sanofi's ($SNY) Allegra, and build its strength in manufacturing.
AMRI was not the only company to have manufacturing issues related to weather this year. Valeant Pharmaceuticals' ($VRX) Bausch + Lomb division recalled 880,000 tubes of eye ointment that it believed had been frozen during delivery last winter, causing consumers to complain about grittiness in the products.
- here's the release