Cambrex has aborted a move to transform itself into a specialty therapeutics company and announced the departure of chief executive John Leone after less than 18 months in the job.
The US company, which provides contract production and development services for pharmaceutical and biotech companies, developed a strategy of acquiring companies and products to evolve into a therapeutics firm. But it now says it has turned its back on the move ‘due to the increasing cost to acquire companies in this sector coupled with the risk of achieving an appropriate return on investment.'
The catalyst for the move had been increasing competition in the contract market for making small-molecule active pharmaceutical ingredients (APIs) and intermediates, which was Cambrex’ biggest business unit.
The firm said it now plans to focus its efforts on cell biology, molecular biology, rapid microbial testing and cell therapy manufacturing – a list which, interestingly, does not include its small-molecule activities. In a statement, Cambrex also said that it plans to retain an investment banker to ‘examine alternatives,’ including the potential sale of certain assets to provide funding for developing its core bioproducts business.
Leone, who also acted as Cambrex’ president, was employed specifically to handle the transformation of the business, so his departure comes as no surprise.
James Mack, Cambrex’ chairman, will serve as acting president and CEO, and Cambre said it would book a $4 million charge in the fourth quarter as a result of the management shuffle and restructuring.
The markets responded favourably to the announcement, with Cambrex shares rising nearly 8% on the news.