By Bachem AG
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Bachem reports accelerated growth for first half 2020
Bubendorf, Switzerland: –Peptide technology specialist Bachem Group has shown strength and reliability in exceptional circumstances by reporting near-record sales and increased profitability for the six months to June 30, 2020.
Bachem has accelerated recruitment and says it is on course to achiever all financial targets for the full year, expecting even better performance in the second half to December 31.
Strong sales growth
Bachem generated sales of 177.1 million CHF for the first half of 2020, an increase of +31.7% over the same period in 2019, demonstrating exceptional resilience in a challenging market environment impacted by the COVID-19 pandemic. Only negative exchange rate effects kept revenues below the Group’s historic half-year best of 179.2 million CHF, achieved in the second half of 2019.
Sales of generic products grew by more than 23% against the same time last year to 71.7 million CHF, with sales in North America almost doubling. Research chemicals sales were lifted by a total of 4.8 million CHF (+35.9% in local currencies LC), mainly due to large orders for catalog bulk products and customer syntheses associated with NCE active-substance development projects.
Sales of new chemical entities (NCEs) continued to grow in both North America and Europe/Asia, clearly exceeding first half 2019 by more than 43% in dollar terms and by more than 95% in LC for Europe/Asia. Despite a growth-driven higher expense base, operating income for the first half of 2020 grew by almost 65% to 40.3 million CHF.
Thanks to a better total capacity utilization and the larger contribution margins resulting from an advantageous product mix, the EBIT margin rose from 18.2% for H1 2019 to 22.7% for H1 2020. Despite unfavorable exchange rate effects, net income rose by almost 61% to 32.8 million CHF by June 30 2020.
To enable further future growth, Bachem invested 25 million CHF during the half in expanding its production capacity at its sites in Switzerland and the USA. The Group also reinforced in-house resources to speed its processing of investment projects. The executive team is planning further capital expenditure of some 60 million CHF during the second half.
The first half also saw Bachem create more than 150 new jobs in its worldwide organization, raising total group workforce to 1,408 people in 1,356 full-time equivalent positions.
Based on its established peptides business and the promising oligonucleotide market segment, Bachem is to increase capacity for its oligonucleotide activities. In the medium term, Bachem is targeting annual sales of over 100 million CHF in this line of business, and is seeking a market position among the top three oligonucleotide contract development and manufacturing organizations (CDMOs).
Outlook: more growth opportunities
These strong mid-year results and an excellent flow of incoming orders strengthen the executive team’s resolve to grow annual sales past 500m CHF within three years.
Assuming a stable exchange rate and current economic environment, Bachem expects to generate new record sales in the second half of over 200 million CHF and to see sales for the full FY 2020 increase by more than 20% over 2019, with an even higher increase in operating profit.
The Swiss based Bachem Group is a public, innovation-driven company specializing in the development and manufacturing of pepTides, oligonucleoTides and complex organic molecules as active pharmaceutical ingredients (APIs). A comprehensive catalog of innovative biochemicals for research and exclusive custom syntheses for research labs complete its service portfolio.
With 50 years of experience, headquartered in Switzerland with subsidiaries in Europe, the US and Asia, the group has a global reach and shows total commitment to quality, innovation and partnership to its customers worldwide.
Under its banner Leading Partner in Tides, Bachem prioritizes continuous investment in R&D on chemistries and technologies as crucial for future success. Its ever-increasing knowledge of complex proteins and peptides derives from ongoing research in proteomics, as well as progress in mass spectrometry, synthesis and ligation technologies, complemented by collaboration with external research institutions.
Bachem has five production sites in the US, UK and Switzerland along with research level production and full cGMP manufacturing facilities on both continents. These provide capacity to produce APIs, key intermediates, small molecule generics, and new chemical entities (NCEs) at preclinical, clinical and production scales.
Further information at: www.bachem.com
Click on Bachem Half Year Report 2020 to access full financial report .