By Tristan Veyet and Chiara Holzhaeuser
(Reuters) -Lonza said on Friday Chairman Albert Baehny will step down in May after six years in the job, in a second senior management reshuffle in recent months as the Swiss contract drug manufacturer grapples with the loss of COVID-related business.
The company also reported better-than-expected sales and margins last year and confirmed its 2024 and mid-term margin targets.
Its stock, which lost 23% last year hurt by guidance cuts and concerns over medium-term targets, was up 13%, topping the pan-European STOXX 600 and heading for its best day ever. Analysts cited relief over outlook confirmation and replacement of a chairman who had overseen guidance cuts and the departure of CEOs.
Lonza said it had proposed Jean-Marc Huet, current chairman of the supervisory board of Dutch brewer Heineken, as a new chairman.
Baehny, who has also served as interim CEO since Pierre-Alain Ruffieux quit in September, will continue in that role until a new CEO commences tenure, Lonza said.
Baehny told reporters Lonza wanted to appoint a new CEO by the end of the first quarter or beginning of the second quarter.
The Basel-based company confirmed its core earnings margin target of “high 20s” for this year, roughly in line with expectations, and its mid-term guidance that includes a 32–34% margin target for core earnings before interest, taxes, depreciation and amortisation (EBITDA).
Sales at constant exchange rates jumped 10.9% last year to 6.7 billion Swiss francs ($7.72 billion), driven by its Biologics and Small Molecules divisions, and beating the 8.2% growth expected by analysts.
This year, however, Lonza sees flat sales due to lost revenue from vaccine maker Moderna, which canceled an mRNA COVID-19 vaccine manufacturing contract on lack of demand.
Lonza’s business was also weighed down last year by drug developers pursuing fewer early-stage ventures.
Baehny said the company saw “signs of improvement”, but not yet a clear rebound, which would probably come in 2025.
Analysts have said that higher interest rates are dampening investor appetite for risky biotech drug ventures, compounding a decline in coronavirus-related activities.
Lonza’s EBITDA margin came in at 29.8% last year, just above the 29.2% expected by analysts in a Vara Research consensus.
Among other companies providing gear and services for drug production, Sartorius on Friday issued a stronger-than-expected sales growth, boosting its shares by 7.55%.
($1 = 0.8674 Swiss francs)
(Reporting by Tristan Veyet and Chiara Holzhaeuser; editing by Jacqueline Wong, Jason Neely and Tomasz Janowski)
