AMRI 3Q09

3Q Revenues: $47.7 million (-22%)

3Q Earnings: $0.4 million

YTD Revenues: $153.0 million (-12%)

YTD Earnings: $2.5 million

Comments: Total contract revenues dropped 27% to $39.7 million from 3Q08; Discovery Services was $11.9 million (-27%), Development/Small Scale Manufacturing was $9.7 million (-33%) and Large Scale Manufacturing was $18.2 million (-22%). Contract revenues are down 17% YTD to $121.8 million. Recurring royalties for the quarter were up 39% to $7.9 million.

Evotec AG and Boehringer Ingelheim have extended their research collabration for four more years. The collaboration was initiated in August 2004 and has been extended on two previous occasions. Based on the success to date in the areas of CNS, inflammation, cardiometabolic and respiratory diseases, the companies have elected to expand the scope of the collaboration to also include oncology targets. Through the term of the extension, Evotec will receive research funding of $22 million, as well as milestones and royalties.

In 2004, Evotec and BI entered into a multiyear drug discovery collaboration to jointly identify and develop preclinical development candidates for the treatment of various diseases. BI has full ownership and global responsibility for clinical development, manufacturing and commercialization of the compounds identified.

In return, Evotec receives ongoing research payments and preclinical milestones. Furthermore, the contract provides substantial long-term upside for Evotec through potential payments for successful milestone achievements during clinical development and royalties when new drugs reach the market.

Dr. Werner Lanthaler, chief executive officer of Evotec, commented, "We are extremely pleased and proud that Boehringer Ingelheim continues to see the value that we bring to their research, by committing to one of the largest and most innovative integrated research projects in the industry. This extension speaks volumes for the excellent scientific results achieved."

Dr. Wolfgang Rettig, corporate senior vice president research of BI, remarked, "Evotec has continually demonstrated exceptional scientific expertise in support of our research. We are very pleased to be able to continue our collaboration with Evotec and expand it into new areas of research and have no doubt that they will continue to assist us in achieving our drug discovery goals."

Enzon Pharmaceuticals (Booth 611) will sell its specialty pharmaceutical business, including its CMO operations, to the sigma-tau Group for $300 million plus an additional amount of up to $27 million based on success milestones. Enzon will also receive royalties of 5 to 10% on incremental net sales above a 2009 baseline amount from Enzon’s four marketed specialty pharmaceutical products through 2014.

Enzon’s specialty pharmaceutical business includes four marketed products: Oncaspar, Adagen, DepoCyt, and Abelcet, as well as the manufacturing facility in Indianapolis, IN which will be purchased by a U.S. subsidiary of Sigma-Tau Pharmaceuticals, Inc., based in MD. Sigma-Tau Pharmaceuticals will distribute the products in the U.S. market.

After the sale of these assets, Enzon’s businesses will consist of its royalties, Peg SN38 and our LNA and PEG technology platforms. “Enzon’s board is evaluating options to return most of the value of this sale to shareholders,” stated Alex Denner, chairman.

“sigma-tau is a great strategic fit for this business, as they have the presence and expertise to effectively market these products in all geographic areas,” said Jeffrey H. Buchalter, Enzon’s president and chief executive officer.

sigma-tau is a global R&D driven, Italian-owned pharmaceutical company dedicated, among other areas, to developing and commercializing medicines for rare diseases. This acquisition will expand sigma-tau’s current presence in the U.S. and in new therapeutic areas.

Marc Tewey, vice president, commercial operations of Sigma-Tau Pharamceuticals, confirmed that the company plans to continue the CMO business.

“sigma-tau is dedicated to providing novel therapeutics to patients suffering from rare diseases and other unmet medical needs,” said Claudio Cavazza, sigma-tau’s president. “Through the acquisition of Enzon’s specialty pharmaceutical business, we will increase our presence in the field of rare diseases with products of great value which are the result of an outstanding research activity. sigma-tau is determined to continue Enzon’s excellent work, especially in the field of rare diseases which is a particularly stimulating one as it aims at tackling life-threatening conditions which all too often affect the very young.”

Win free registration and hotel for 2010 AAPS, courtesy of DPT (Booth 1701)!

Register with DPT for a chance to win FREE registration and hotel stay during the 2010 AAPS Annual Meeting & Expo in New Orleans. Entry tickets are in AAPS registration bags (or you can stop by DPT's booth to pick one up).

Drop off your entry ticket at booth 1701 for your chance to win.One winner will be selected each day of the tradeshow!

(NOTE: must be a pharmaceutical, biotechnology or consumer healthcare employee to enter.)

Catalent Pharma Solutions (Booth 1301) has entered into a strategic alliance with Endotis Pharma for the development of oral formulations of synthetic oligosaccharides.

Using Catalent's drug delivery technologies, the two companies will collaborate exclusively to develop certain oral formulations of small-glycol drugs. Oral formulations of synthetic oligosaccharides will allow full exploitation of the therapeutic potential of small-glycol drugs, which to date are administered only intravenously or subcutaneously.

Catalent and Endotis are initially focusing on the preclinical development of Endotis' EP37151 compound. EP37151 is a first-in-class oral synthetic oligosaccharide anticoagulant which, as an indirect factor Xa inhibitor, acts via antithrombin activation. The companies expect to initiate a Phase I clinical trial program during the second quarter of 2010, and hope to have more oral anticoagulants enter development within the next year.

"This collaboration with Endotis, based upon a unique combination of complementary expertise, has been providing exciting results, proving that the various technical hurdles associated with the oral delivery of small-glycol drugs can be overcome," said Tom Stuart, group president of Catalent's Oral Technologies segment.

DSM Pharmaceutical Products (Booth 1333) has entered a manufacturing alliance with Galenix of Saint Jean D'Illac, France, in which DSM will be the preferred commercial scale manufacturing partner for Galenix commercial products on a global basis.

DSM and Galenix will collaborate on business development opportunities co-marketing Galenix drug delivery technologies, based on the strength of Galenix in drug product development and clinical services and DSM in process development, scale up and commercial scale pharmaceutical manufacturing.

Pieter de Geus, DSM Pharmaceuticals' senior vice president, R&D stated, "These innovative drug delivery technologies enhance our offering in the field of pharmaceutical development services and complement our portfolio of drug delivery technologies. The collaboration with Galenix clearly demonstrates DSM's commitment to bringing improved drug delivery to markets globally."

Hans Engels, president of DSM Pharmaceuticals, added, "The alliance brings out the best of both parties. Combining innovative formulations with flawless transition into commercial products creates an attractive value proposition for any drug company."

Jerome Besse, chief executive officer of Galenix, commented, "This is truly a win-win situation. Galenix is privileged in working with DSM to generate value for our customers. The partnership fits with our strategic intention of expanding service offerings to the North America market, and also with DSM's expansion of sales & marketing focus in Europe."

No financial terms were disclosed.

Analytical Bio-Chemistry Laboratories (ABC, Booth 1119) has expanded its offerings to include comprehensive support for large molecule development.

"This recent investment in biotech development services complements ABC's long history of ELISA, RIA and EIA experience and bioanalytical support. It also leverages ABC's extensive analytical capabilities to provide our clients with more comprehensive support for both large and small molecules," said John Bucksath, general manager and senior vice president of ABC's Pharmaceutical Services division.

To lead the development of a dedicated biotech team and laboratory, ABC recruited industry veteran, John C. Anders, Ph.D., who brings more than 24 years of experience in biopharmaceutical development from both the sponsor and CRO sides of the business. Dr. Anders has held several leadership positions building and leading advanced CGMP biotechnology analytical laboratories, and has expertise in time-tested and new technologies in protein chemistry, analytical methods and analysis of macromolecules by various methods. He played a major role in developing a pipeline of seven genomic expression tests for diagnosis and risk assessment of various types of cancer, including the successful completion of a pre-IND application to the FDA and development of a clinical protocol slated to begin soon.

Dr. Anders has assembled a team of biopharmaceutical experts, each with more than 18 years of experience in protein chemistry and chromatography. To ensure the team is well equipped to meet client demand, ABC has invested in a leading-edge biotech lab housed in ABC’s new, 90,000-sq.-ft. pharmaceutical development facility in Columbia, MO.

“Despite a challenging economic environment, 2009 was a positive year for ABC Laboratories,” said Mr. Bucksath. "Recent investments in people, processes and systems have resulted in 13% growth over 2008 and positioned us well to deliver on our customer’s needs in the years to come.”

ProChon Biotech, Ltd. has selected Lonza (Booth 2800) to manufacture its fibroblast growth factor (FGF2v) variant at its Hopkinton, MA facility. FGF2v is a key regulator of cellular processes involved in blood vessel formation, wound healing and the remodeling of bone and cartilage and is a component of ProChon's BioCart Cartilage Regeneration System.

"With an unparalleled track record in contract manufacturing, Lonza is the ideal partner to manufacture our fibroblast growth factor system," said Patrick O'Donnell, chief executive officer of ProChon. "As we accelerate the BioCart clinical program at medical centers across the country, it is vitally important to have immediate access to our core technology and working with Lonza will make this a reality. We look forward to working with Lonza to develop FGF2v as we move toward our goal of bringing mobility to millions of people who suffer from cartilage injuries."

"We are very pleased to enter this collaboration with ProChon to advance a critical new biotherapy for cartilage regeneration," said Dr. Stephan Kutzer, head of Lonza Custom Manufacturing. "We look forward to supporting ProChon with innovative development services and the latest in biopharmaceutical manufacturing technologies and expect this to be the basis for a successful, long-term relationship."

Althea Technologies (Booth 819) has added customized formulation development services to its portfolio. The services will be overseen by newly appointed Dr. James Matsuura, who takes the title director of Formulation Development.

According to a company statement, "This investment in an experienced team of formulation and analytical scientists, along with new laboratory facilities and state-of-the-art equipment, enhances and complements Althea's existing expertise and capabilities in cGMP biologics manufacturing and aseptic filling of injectable products, and completes the full integration of development and manufacturing services available for clients from early-stage development through commercial supply."

The new formulation laboratories are an expansion to the clinical manufacturing facility located on the San Diego campus and are further supported by the analytical expertise of Windrose Analytica, which Althea acquired earlier this year. "The addition of our new formulation development laboratories is the perfect complement to our advanced protein and peptide analytical capabilities, and will allow us to bring our clients' products into the clinic with unmatched speed, efficiency and effectiveness," noted Dr. Alan Herman, vice president of Product Development & chief scientific officer.

"We are delighted to have Dr. James Matsuura join Althea. His many years of experience bring added value to clients in helping them with the complexities of developing protein formulations for both clinical trials and product launch in our new commercial manufacturing facility," commented Dr. Shabbir Anik, Althea's president and chief executive officer.

The expanded facilities include a new development lyophilizer, which allows the group to optimize lyophilization cycles for products requiring enhanced stability. The new formulation laboratory and staff, operating closely with the analytical development group, complete Althea's product development group and enable Althea to support clients with critical development steps, as well as the manufacture of API and finished product.

Surface Measurement Systems Ltd. (Booth 2147) and Particulate Systems, a brand of Micromeritics Instrument Corp. (Booth 2251), have signed a global strategic collaboration. The collaboration will draw on the combined knowledge and experience of both companies in the design and development of advanced analytical equipment for the characterization of particulate, porous, and complex materials. Working together, both companies will strengthen their ability to deliver customer-focused instrumentation solutions globally, according to a joint statement.

In the initial phase of this collaboration, Particulate Systems will have the exclusive distribution rights for key SMS products in selected regions of the U.S. as well as in South America, Central America, and the Middle East. These products include the DVS Dynamic Vapor Sorption systems that utilize dynamic gas flow and the gravimetric technique to produce high-resolution adsorption and desorption isotherms of water and organic vapors on essentially any solid material. In addition, SMS will extend its service and support for customers in the U.S. via the Particulate Systems’ extensive aftercare network. Particulate Systems will also have co-distribution rights to sell Surface Measurement Systems products in China.

Particulate Systems and SMS will begin organizing joint academic meetings, symposia, and other academic training programs to advance the development of particle and sorption technology starting in October 2009.

Preston Hendrix, president of Micromeritics, stated, “Collaboration between the two organizations enhances our ability to offer advanced analytical tools to guide research, resolve problems in production and QC, and to expand the understanding of material structure in general. Joining forces with SMS provides the customers of both companies additional options for solving their analytical needs.”

Dr. Daryl Williams, managing director and founder of SMS, added, “This new relationship builds on both a business and product synergy between our two companies which will allow us to provide total instrumentation solutions for many new research and development sectors.”

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