We are benefitting from our global reach and our competitive value proposition to customers. With our important investments and acquisitions we are taking leadership in selected markets. Our objectives and strategies remain unchanged. We will continue to build powerful, long lasting partnerships with strategically important customers, in addition to adding further technologies and differentiating businesses, based on customer needs.
This new offering is the latest phase in our company-wide serialisation project which was launched in 2016 following a EUR 40 million investment. In recent years, Recipharm has become known for taking a lead in the serialisation challenge. As the deadline gets closer we’re seeing more and more companies ask if we can provide an outsourced serialisation service that caters for the new requirements, even if the product itself is not manufactured within Recipharm it made sense to allow customers who were struggling with their existing provider to get access to our solution. Implementing these measures independently across packaging lines to ensure compliance is a relatively straightforward process when using offline equipment. Our experience of serialisation means we can ensure compliance quickly and efficiently for our customers.
We are very pleased to have reached this agreement with SERB as we believe they are far better placed to maximize the potential of ThyroSafe® by including it within their portfolio of emergency products. Many countries stockpile potassium iodide products to have as a preventive measure in case of sudden radiation exposure, but there are still many countries that have not taken sufficient action in this area. I am confident that SERB will be able to grow the volumes of the product. We are also delighted that we will continue to provide our expertise in the manufacture of ThyroSafe® in the long term.
Holmes Chapel brings Recipharm an ideal opportunity to accelerate its offering to customers with access to novel respiratory products. As an already successful CMO with several clients, we look forward to introducing new contracts to Holmes Chapel by utilising our growing franchise in development services. Treatments for asthma and chronic obstructive pulmonary disease (COPD) are growing at a fast rate and we see many opportunities. The experienced management team and staff have already successfully attracted new customers and we look forward to building on this from the well invested facility.
We are delighted that the Holmes Chapel site is being bought by a company who will further develop the site and its employees, and bring opportunities to utilise the existing technologies and capabilities.
Holmes Chapel brings Recipharm an ideal opportunity to accelerate its offering to customers with access to novel of respiratory products. As an already successful CMO with several clients, we look forward to introducing new contracts to Holmes Chapel by utilising our growing franchise in development services. Treatments for asthma and chronic obstructive pulmonary disease (COPD) are growing at a fast rate and we see many opportunities. The experienced management team and staff have already successfully attracted new customers and we look forward to building on this from the well invested facility.
Recipharm’s presence in both the UK and mainland Europe means we are well positioned to support our customers post-Brexit. We are also adept at streamlining processes across geographies and dealing with third party importations into Europe due to our global facilities. Brexit has the potential to bring about additional resource demands. We are focused on ensuring our team is equipped to handle the potential challenges so that our customers continue to receive the same level of service. We also expect to see a greater demand for outsourced manufacturing services from UK-based marketing authorisation holders (MAHs) wishing to supply to Europe and are preparing our team to meet this demand.
The partnership will support business growth in Israel, giving Recipharm access to the majority of the clinical trials taking place in the country. While the field of chemistry services is relatively new to this market, the growth potential is substantial, with more than 800 biotech companies in Israel and the number and size of these companies continuing to grow. By collaborating with one of the most prestigious hospitals in the region and its commercial arm, we believe this will support our goal to become the most trusted CDMO in the region.
Through the partnership we will be able to offer a full service for the synthesis and testing of compounds. Working with Recipharm, our team will gain professional input regarding the compounds that Hadassah researchers and Hadasit companies are developing, including synthesis and medicinal chemistry challenges. We are looking forward to a mutually beneficial long-term partnership which will ultimately help both companies to grow and support the pharmaceutical industry in Israel.
We see solid growth and performance in our ongoing manufacturing and development business, while we are just beginning to deliver from major expansion investments. Sales for the quarter was an all-time high and first time ever over SEK 1.5 billion. Growth in continuing operations, adjusted for currency translation effects and acquisitions was about 10 per cent. All segments report organic growth and improved EBITDA-margin. EBITDA was the highest ever for a quarter and SEK 90 million higher than any previous first quarters. EBITDA-margin for the group increased to 16.5 per cent. /.../ The markets we operate in remain challenging, but I am convinced that we will benefit from the global reach and our competitive value proposition to customers. With our important investments we are taking leadership in selected markets and we will explore opportunities to add further technologies and differentiating businesses to our customer offering. There are tremendous opportunities in our global structure and we are determined to explore these.
We’re delighted to have again been rewarded for our efforts as part of the CMO Leaderships Awards. These awards in particular allow us to gain an uncensored insight into how our customers feel we’re performing so it’s great to be recognised year on year. At Recipharm, we’re dedicated to offering not only quality development and manufacturing services, but also ensuring our customers benefit from our expertise and wide-ranging capabilities, so to be recognised in all six categories this year is a fantastic achievement for us.
Recipharm has only owned the facility for two years and during that time have taken some very fast and positive decisions to invest in Kaysersberg. We have worked hard to develop a flexible service that can cater for even the most complex of projects. Adding the line to our facility will allow us to take on new customer projects more quickly, as well as continue to meet our current customers’ requirements. The additional space we’ve added also means we are also well positioned for further growth in line with future customer demand.
We are delighted to present the 2017 award to Karen Kidd. Her work, which explores the potential effects and risks of contaminants on fish and whole ecosystems, is truly impressive. This research will no doubt be essential in building commitment towards environmental matters and provides valuable guidance for future actions in order to decrease or avoid the negative effects of chemical contamination.
The combination of amazing research facilities like the IISD Experimental Lakes Area, considerable support from the federal government and private sector, and an outstanding group of collaborators have enabled us to advance the knowledge on how widely-used chemicals, including pharmaceuticals, are impacting the health and sustainability of aquatic systems. My experiences have absolutely reinforced the idea that collectively we can accomplish so much more towards solving pressing environmental issues and minimizing our impacts on water quality and aquatic ecosystems. I am very honoured to receive this award and thank Recipharm for the recognition of our research.
This collaboration is an exciting step for Recipharm, enabling us to bring innovative drug delivery technologies to our customers and ultimately develop novel, safer and cost effective new products. We look forward to working with Altus to increase the use of its technologies in Europe.
We are delighted to enter into this agreement and look forward to co-developing a range of patent protected, label differentiated new products with Recipharm and its customers.
During his time with Recipharm, Henrik has, amongst other things, further developed the Group’s financing as well as finance function, in terms of both its organization and competence. We are highly grateful for his contribution and wish him all the best for the future.
We had a positive finish of the year, a year characterized by solid underlying demand but also delays in important projects and other issues. /.../ Our expansion projects will start to deliver towards the end of the first quarter and we will see a gradual ramp-up during the next 4-6 quarters. As projects finish we will see less capex and supported by increased profit, leverage will gradually decrease. Ending operations in the two Swedish facilities is painful. However, with the addition of a modern well invested facility in Spain and competitive operations in India we will get a streamlined and efficient structure, well suited to support our demanding customers’ needs globally. I am confident that we will reach our SEK 8 billion sales target by 2020 and have an EBITDA-margin target of at least 16 per cent.
I am delighted to announce the appointment of Bernard Pluta as President, Development Services. Bernard has managed our operations in Pessac with great success. His industry expertise and solid business competence will play a key role in transforming our development services and ensuring a seamless end to end offering. By providing a wide range of development services we are well positioned to manage challenging projects and complexity on behalf of our customers.
I have been particularly pleased with the way the performance in Nitin Lifesciences has developed since it became part of the Recipharm Group. Both sales and margins have grown in the business despite the recent macro-economic volatility in India and we foresee this favorable development to continue. The transaction will allow us to combine and better exploit operational synergies with our other Indian business. The equity investment will align interests of the Sobti family. As such, I have great pleasure in announcing that current chief executives and members of the founding family Dr Chetan Sobti and Mr Nitin Sobti shall not only continue to spearhead the current business but also in addition take on the responsibility to develop and grow Recipharm’s total business in the Indian and emerging markets.
We are continuing to gain momentum in the CDMO market and this latest agreement is another demonstration of this. I welcome our new colleagues in Spain and look forward to providing Roche with first-class CDMO services.
I am honoured that Recipharm has been acknowledged for our decade-long commitment to France. We have been very pleased with the development of our business there and I would like to thank the Swedish Chamber of Commerce in France for recognising this.
We’ve taken a very proactive approach to tackling serialisation as we understand the critical role that contract manufacturers must play in ensuring continuous supply of vital medicines in key markets. In addition to equipping nine of our sites ahead of the EU deadline and the new US enforcement date, we’ve also introduced a serialisation task force to ensure a consistent roll out of our standard solution across all of our facilities.
We continue to work hard to deliver on our strategies and to meet our targets. We invest heavily to take leadership in markets where demand is expected to be high. We perform optimisation and improvements of our structure in order to increase profitability and offer our customers attractive solutions. We receive positive feedback from our customers both in terms of our long-term strategy and of our current work. We see good opportunities to initiate and deepen important long-term relations with key customers. I therefore feel confident that we will reach our overall financial targets and be a leading global CDMO.
The intended changes will enable us to serve our customers with best in class service and value. We will see immediate efficiency improvements from this change and in the long term, it will allow Recipharm to offer a more competitive manufacturing structure for oral solids. While this is a strategic choice made to optimize our manufacturing, it is a difficult decision as the closure affects approximately 225 of our Swedish employees, who have demonstrated commitment and hard work to provide high quality products and services. It is of course our intention to ensure fair and respectful treatment to all throughout this process. Moving forward, the planned changes will enable us to focus our attention on the most competitive and efficient manufacturing facilities in our group. At a strategic level, we continue to pursue our mission to develop and manufacture pharmaceuticals for demanding customers for global use. As such, our financial objectives remain unchanged.
Recipharm recognised the complexity of implementing serialisation at a very early stage and so we’ve been preparing for the new regulations in the US and Europe for a long time now. The Lisbon facility brings us to over a third of the way through our implementation project and is an important milestone in our journey.
We are continuing to gain momentum in the CDMO market through our various profitable growth initiatives. I am therefore delighted to announce this long-term agreement with Roche. It has become clear during our interactions with Roche that we are closely aligned in our ways of doing business, and we look forward to developing this relationship further by providing high-quality, reliable supplies from Leganés in future. In addition, we see a highly interesting business development opportunity to add new customers.
We are happy to be able to contribute to the development of a new drug with the potential to be of great medical value. We have extensive experience in developing drugs for clinical trials as well as commercial manufacture and this will be very valuable in the collaboration with Kancera.
The decision to commence development of capsules for an active dosage of KAND567 shows that Kancera has reached an important milestone in the Fractalkine project. We are delighted to now be collaborating with Recipharm to produce the pharmaceutical product that will be used to study how KAND567 can help patients.
Our customers often face problems in terms of meeting timelines, adhering to changing regulations and managing trial complexity and it is our job to guide them through the process. Quite simply, Recipharm’s Pathway to Clinic™ service means we take responsibility for the full phase I programme, from formulation to clinical trial implementation with patients. Managing the different aspects of phase I, while reducing risk, time and cost, requires a clear roadmap and close collaboration between the different disciplines. Through partnering with CTC, we have complete control over all the links in the chain so can adjust at each step to avoid delays, meet deadlines and build value for our customers.
Progressing a drug to achieve first in human results is a complex process. Together with Recipharm, we can offer a complete integrated service where all the parts have been optimised to give our customers a fast and cost-effective development program until proof of concept.
Sales and EBITDA developed well and in line with our expectations for the quarter.
We are proud of having reached this important milestone in the development of a new product allowing improved therapy for a serious disease. This has been achieved by the hard work and close collaboration of experts at both LIDDS and Recipharm. LIDDS is a very innovative company and it has been extremely rewarding to work with the team.
With the successful manufacturing performed at Recipharm, LIDDS can offer license agreements for Liproca® Depot with the advantage of having validated production in place, saving both time and money for pharma companies. In addition, we now have an established manufacturing facility ready for other NanoZolid® projects.
As we continue to grow as a company, with our focus on decentralised operations, we are highly dependent on talented people at key posts throughout the Recipharm organisation. With his extensive knowledge of the pharmaceutical sector in the UK & Ireland, we believe Shabbir is the perfect addition to our team and will help to drive our business forward in this key market.
Recipharm is highly regarded as a significant force in the pharmaceutical sector and as the CDMO continues to expand its presence and service offering globally, it’s an exciting time to join the team. Recipharm is focused on simplifying the supply chain and managing complexity on behalf of pharmaceutical companies across the world and I look forward to playing my part by supporting our customers in the UK & Ireland.
With a sales growth of 37 percent we report the highest ever sales for a first quarter. /..../ The underlying business is developing according to plan and we maintain our overall objectives.
At Recipharm, we are focused on managing complexity for our customers and this means providing a full service offering to simplify the supply chain. Bolstering our development business is a key priority and with this investment, we are now able to offer our customers in the US a broader range of services and help them take their projects to the clinical phase in an efficient way. The new suite also meets an industry-wide demand for cGMP manufacturing space for orally inhaled drug products.
Recipharm has been supplying serialised products to markets including Turkey, Korea and China for many years and our investment in the Saudi Arabian market is the latest step in our goal to assist pharmaceutical companies with the complex web of requirements in the US, Europe and Asia.
We made significant progress on our strategic commitments during the year – including the expansion of our geographic footprint beyond our strong European base, and building on our public listing in 2014 to leverage international investment.
I am very pleased to welcome Henrik, his extensive experience and perspectives in finance, business and strategic development in the pharmaceutical industry make him a great fit for Recipharm as we continue on our strong growth path.
I'm looking forward to contributing to the continued success of Recipharm in my new capacity as Chief Financial Officer of this leading company.
We first established a business relationship with Sato in 2012 and this new supply agreement extends our partnership further. We are looking forward to the launch in Japan and cooperating with Sato in developing the business, to the benefit of both companies.
We are delighted to present the 2016 award to Alistair Boxall. His work, which extends far beyond measuring concentration levels, has helped change attitudes and improve understanding of the detection, fate, effect and risks of contaminants on both human health and whole ecosystems. His research has been integral to building commitment towards environmental matters and is providing valuable guidance for future actions to decrease or avoid the negative effects of chemical contamination.
I am delighted to receive the award. Our research on chemical contaminants has been a real team effort and the progress we have made wouldn’t have been possible without the hard work and commitment of my peers, students and postdocs. It is also a great testament to today’s research programmes that the pharmaceutical industry is recognising the importance of environmental impact and actively adapting practices to reduce the effects of contaminants and safeguard the environment.
The fourth quarter marks the end of a transaction intensive year for Recipharm. With an increase in net sales of 54 percent we recorded all time high sales for a quarter. Excluding acquisitions sales was still the highest ever for a fourth quarter with an increase of 16 percent, driven by the Sterile Liquids segment. /.../ During 2017 we will explore the many opportunities we see from our global organisation, start supply from the first of our major capacity expansion investments and begin to supply serialized products to the US market. We will continue to build powerful, long lasting partnerships with strategically important customers, in addition to executing on accretive acquisition opportunities. We are well on track to reach our long-term financial targets and overall objectives.
I am pleased we have now finally completed this important acquisition. We are now in a position to offer our customers access to cost effective development and manufacturing capabilities able to serve international markets including the US. These acquisitions are already showing great promise and I am pleased the current Managing Director, Anurag Bagaria, and VP Corporate Development, Karan Bagaria, will continue in their current positions going forward.
We are disappointed to be losing Mr Westberg and we would like to sincerely thank him for the significant contributions he has made to Recipharm in the past 10 years. He has been a strong leader and has brought invaluable expertise to the company.
Over the past year, Recipharm’s development business has continued to expand, with the integration of new facilities, technologies and capabilities. The new North American sales organisation will be extremely important for Recipharm as it will enable the company to attract US customers to its extensive network of development and manufacturing facilities outside of the US. We are very pleased to have such skilled, ambitious and enthusiastic professionals like Anders and Aaron to lead these two sales teams. Their contributions will be extremely valuable in the development of our business in offering new and existing customers access to our world class contract development and manufacturing services.
We are delighted to be collaborating with Recipharm, they are an expert partner that we can rely on for the commercial supply of our new product. Given the potential market for the product, a major benefit of partnering with Recipharm is that they have a high level of production capacity, which of course gives us the possibility to further scale up the batch size to meet market requirements in the future.