Patheon optimistic in spite of difficult year

In spite of a difficult year, Canadian drugmaker Patheon says it is "well positioned for profitable growth" when market conditions improve.

Chief executive Wes Wheeler said even though Patheon's net income for the year fell by 8.7% to US$665m, the company performed better than the market as a whole.

Gross profit for the period decreased 8.4% to US$143.9 million.

Wheeler said the results were "negatively impacted by industry market conditions, regulatory product delays and operational issues in Puerto Rico and US$8m of Special Committee expenses relating to the JLL Bid".

He added that the company had now dealt with these challenges and was well positioned for profitable growth.

Patheon said last week that it planned to consolidate its Puerto Rico operations into its manufacturing site at Manati, and will ultimately close or sell its plant in Caguas.

Revenue for the fourth quarter rose by 2.3% to US$176.1m as a strong performance from its European divisions offset a decline in North America owing to the issues in Puerto Rico and lower revenues in Canada.

Operating income for the fourth quarter increased to US$15.4m, up 73%.

Wheeler said the fourth quarter results reflect the work the company's efforts to lower its cost base, increase production efficiency and maintain high quality standards.

"We are also now able to move on from the distractions and expense of the ongoing dispute between the company's Special Committee and JLL Partners over the last year, which was ended by signing a settlement that received court approval on 4 December 2009," he added.

Lonza withdrew its US$460m offer to acquire Patheon in October, citing the cost and opposition from JLL, which owns 57% of Patheon.

The company also said it expects to record a US$7m charge in the first quarter of 2010 as it closes the Caguas plant and consolidates operations in Puerto Rico.

The consolidation will be completed by the end of the 2011 financial year.