AMRI (NASDAQ: AMRI) today reported financial and operating results for the first quarter ended March 31, 2010.
“As we enter the second quarter, integration efforts for our new location in the United Kingdom are well underway and we continue to be excited about the prospects for this new part of our service offering.”
Financial and operational highlights for the quarter include:
- Discovery Services contract revenue up 7% from first quarter 2009 levels
- Completion of the acquisition of Excelsyn Ltd. in U.K. to expand geographic service offering in our Development and Large Scale business components
First Quarter 2010 Results
Total revenue for the first quarter of 2010 was $49.3 million, a decrease of 9% compared to total revenue of $54.0 million reported in the first quarter of 2009.
Total contract revenue for the first quarter of 2010 was $38.9 million, a decrease of 10% compared to total contract revenue of $43.2 million reported in 2009. Total contract revenue encompasses revenue from AMRI's Discovery Services, Development and Small Scale Manufacturing, and Large Scale Manufacturing business components.
- Discovery Services contract revenue for the first quarter was $12.3 million, an increase of 7% from $11.6 million in 2009
- Development/Small Scale Manufacturing contract revenue for the first quarter was $8.7 million, a decrease of 21% from $10.9 million in 2009
- Large Scale Manufacturing contract revenue for the first quarter was $17.9 million, a decrease of 14% from $20.7 million in 2009
Recurring royalties in the first quarter of 2010 were $10.4 million, a decrease of 3% compared to recurring royalties of $10.8 million reported in 2009. AMRI earns royalties from worldwide sales of the non-sedating antihistamine Allegra® (Telfast® outside the United States), as well as certain generic forms of Allegra®, for patents relating to the active ingredient in Allegra®.
Net income under U.S. GAAP was $0.1 million, or $0.00 per diluted share, in the first quarter of 2010 which includes the impact of $0.9 million in costs related to our acquisition of Excelsyn, Ltd., or $0.02 per diluted share. Excluding this item, net income on an adjusted basis in the first quarter of 2010 was $0.6 million, or $0.02 per diluted share.
The costs related to the acquisition of Excelsyn include legal and other professional fees and other costs directly related to the acquisition.
AMRI Chairman, President and CEO Thomas E. D'Ambra said, "As we end the first quarter of 2010, the growth we continue to experience in our Discovery Services segment, and in particular, our locations in Singapore, India and Hungary, supports our position to remain cautiously optimistic. We are proceeding with our previously communicated plans to hire additional scientific talent at these locations. Our two recently announced collaborations, with Navigen Pharmaceuticals and CHDI Foundation, are indications of an increased demand for our integrated drug discovery services platform spanning both chemistry and biology services."
Dr. D'Ambra continued, "As we enter the second quarter, integration efforts for our new location in the United Kingdom are well underway and we continue to be excited about the prospects for this new part of our service offering."
Liquidity and Capital Resources
At March 31, 2010, AMRI had cash, cash equivalents and marketable securities of $84.7 million, compared to $111.1 million at December 31, 2009.
The decrease of $26.3 million in cash, cash equivalents and marketable securities in the first quarter of 2010 was due to the purchase of Excelsyn Ltd. for approximately $19.4 million, including acquisition costs of $0.9 million, and $6.2 million in cash used for operations.
Total debt at March 31, 2010 was $13.5 million, unchanged from December 31, 2009. Cash, cash equivalents, and marketable securities, net of debt, were $71.2 million at March 31, 2010. Total common shares outstanding, net of treasury shares, were 31,808,241 at March 31, 2010.
2010 Financial Guidance Update
AMRI Chief Financial Officer Mark T. Frost provided contract revenue and EPS guidance for the second quarter and the full year 2010. "In the second quarter, we expect contract revenue to range from $39 million to $43 million, an increase of up to 11% from second quarter 2009 levels. For the full year 2010, we expect contract revenue to range from $167 million to $177 million, an increase of up to 13% versus 2009."
Mr. Frost continued, "With regard to our royalty revenues from worldwide sales of Allegra® and certain generic forms of Allegra®, we expect second quarter royalties of approximately $7 million to $8 million and expect full year 2010 royalties of approximately $28 million to $30 million. For the second quarter, we expect EPS to range from $(0.03) to $(0.07). For the full year we expect EPS to range from $0.00 to $(0.06)."
Recent noteworthy announcements or milestones at AMRI include the following:
- The acquisition of Excelsyn Ltd., a well recognized leader in providing chemical development and manufacturing services to the pharmaceutical industry in Europe, located in North Wales, U.K., immediately expanding the company's products and services, geographic footprint and market share in Europe.
- The filing of a preliminary injunction, along with sanofi-aventis U.S. LLC, in the United States District Court for the District of New Jersey seeking to enjoin Dr. Reddy's Laboratories, Ltd. and Dr. Reddy's Laboratories, Inc. (Dr. Reddy's) from the commercial distribution of generic versions of Allegra-D® 24 Hour (fexofenadine HCl 180 mg and pseudoephedrine HCl 240 mg) Extended-Release Tablets in the U.S.
- The initiation of a research collaboration with Navigen Pharmaceuticals, Inc. focused on the development of new drug therapies deploying AMRI's fully integrated drug discovery services including assay development, screening, in vitro ADMET, computer- aided drug discovery (CADD) and medicinal chemistry.
- The five year extension and expansion of an ongoing research collaboration with CHDI Foundation, Inc. (CHDI) focused on the discovery of new therapeutic agents for the treatment of Huntington's disease (HD) further deploying AMRI's integrated biology and chemistry capabilities.
- The certification of specific AMRI high potency research laboratories and GMP-manufacturing facilities in Rensselaer, New York for the safe handling of potent active pharmaceutical ingredients (APIs) by SafeBridge® Consultants, Inc.
- The successful outcome of a FDA inspection of the company's U.S. manufacturing facility in April 2010 with no issuance of a Form 483.
SOURCE Albany Molecular Research, Inc. (AMRI)