Johnson Matthey reported that its active pharmaceutical manufacturing (API) revenue grew 6% to £211m ($353m), citing the US launch of an unnamed generic opiate-based drug for the treatment of addiction as a key driver.
CEO Neil Carson told investors the firm had made “steady progress in APIs, especially in the US. We are continuing to add more APIs to the portfolio and that will benefit our sales in future years.”
Another factor was higher demand for the ADHD drug API methylphenidate according to Carson, who said that this included “additional revenue following some supply shortages for one generic product that resulted in an increase in its prices.”
Another source of revenue was a US patent for the API oxmorphone hydrochloride - the active ingredient in the Opana range pain drugs - that Johnson Matthey sold to manufacturer Endo Pharmaceuticals in 2012.
Gains made in APIs helped Johnson Matthey's fine chemicals business to grow revenue 8% to £371m in fiscal 2004, making the division the firm's fourth largest operation in terms of sales behind precious metals, emission control and process technologies.
Johnson Matthey started a review of the API business, which consists of Scotland-based opiate alkaloid producer Macfarlan Smith and a New Jersey-headquartered pharmaceutical materials unit, in February last year in a bid to “optimize resources.”
At the time the firm said that increased competition as a result of changes to UK laws on the importation of controlled substances had prompted it to look again at its API business.
This restructuring process – which included cutting 30 jobs at Macfarlan – is now over even though - according to Johnson Matthey - the future shape of the UK market is still hard to predict.
“We have completed the restructuring at our UK API manufacturing operation, which represents around 40% of our API Manufacturing business, and the business is now better positioned to compete in today’s more open market. The UK government has yet to confirm its future intentions on the importation of controlled substances.”
Johnson Matthey also set out its plan for its API business going forward, explaining that it will try to capture a larger share of the non-branded drug market.
“We are focusing on complex, typically smaller volume, APIs and are working with a number of customers to help them develop new generic drugs in anticipation of the expiry of existing branded drug patents.”
The firm did not respond to a request comment.
CEO Neil Carson stepped down today in a planned move. He will be replaced by group finance director Robert MacLeod.