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Additional Information
Market: TSX
Sector: Medical
EPIC: PTI
Latest Price: 1.35  (0.75% Ascending)
52-week High: 2.74
52-week Low: 1.12
Market Cap: 174.38M
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Patheon Inc
www.patheon.com

Patheon is a leading provider of contract development and manufacturing services to the global pharmaceutical industry. Patheon's technologies and services range from pre-clinical development to manufacturing a full array of dosage forms.

Full Patheon Inc profile here
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Patheon first quarter sales rise 5% thanks to favourable currency movements

15th Mar 2010, 12:56 pm
Patheon first quarter sales rise 5% thanks to favourable currency movements

Drug development and manufacturing services group, Patheon (TSX:PTI) reported a 5.2% increase in first quarter revenues  (ended January 31, 2010) to $154.8 million, massaged by favourable currency movements. Excluding currency fluctuations, first quarter revenues actually fell 1%.  


The Toronto listed group reported an operating loss of $6.6 million (Q1 2009: loss $3.9 million) and adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) of $9.3 million, down from $12.8 million in Q1 2009.


Q1 2010 gross profit decreased to $24.6 million from $30.7 million in the same quarter year, and gross profit margins fell sharply to 15.9% from 20.9% in the prior year.  “This decrease was due to $2.4 million of higher depreciation in part because of accelerated depreciation in connection with the planned Caguas closure, production delays due to customer-supplied material shortages that impacted revenues, unfavorable foreign exchange impact, and lower PDS volumes on a relatively fixed overhead cost basis. These factors were partially offset by a decrease to cost of goods sold due to realization this quarter of prior period Canadian R&D investment tax credits,” Patheon noted.


Selling, general and administrative costs rose to $28.8 million in the first quarter of 2010 (Q1 2009: $26.3 million), which was primarily due to a one off cost of $3 million for a special committee.


The loss per share from continuing operations for the quarter was 8.3 cents compared with a loss of 5.6 cents a year earlier.


"Our commercial operations performed reasonably well despite several disappointing supplier-related delays. However, PDS revenue was somewhat lower as we continued to see soft market demand, which appears to be consistent with the rest of the industry. New commercial business has been slow in coming due primarily to pending post-merger decision making at large pharmaceutical companies," said Wes Wheeler, Chief Executive Officer and President of Patheon. "However, since the beginning of calendar 2010, we have seen an encouraging increase in new sales activity as improved funding has become available for development stage companies. We have also begun active discussions in connection with the pending rationalization programs which will flow from the 2009 pharmaceutical industry merger activity."


Looking ahead, Patheon expects to report full fiscal 2010 revenues and Adjusted EBITDA to exceed its 2009 results, but the company did not elaborate further.

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