* Sales and earnings beat forecasts during H1
* Company raises sales guidance for full year
* Plans to increase capex during H2 to raise production
(Adds details, analyst comment, share price)
By John Revill
ZURICH, July 23 (Reuters) - Swiss contract drugmaker Lonza
lifted its 2021 outlook on Friday after sales for the
first half of the year beat analyst expectations as it benefits
from a booming business making ingredients for COVID-19
vaccines.
The company, which has intensified agreements with vaccine
producer Moderna, posted a 13.3% jump in sales to 2.54
billion Swiss francs ($2.76 billion), beating analyst forecasts
for 2.47 billion francs.
Lonza now expects sales to increase in constant exchange
rates towards the mid-teens percentage level for 2021, up from
its previous forecast for sales growth in the low double-digit
range.
Core earnings before interest, tax, depreciation and
amortisation (EBITDA) rose 13% to 847 million francs, beating
the 787 million francs forecast in a company-gathered poll of
analysts.
The margin dipped to 33.3% from 33.4% a year earlier, but
Lonza said it still expected to improve it this year.
Lonza shares, which have outpaced the blue-chip Swiss Market
Index by rising 19.4% in 2021, were 2.1% higher in early
trading.
Customer demand for COVID-related projects had continued
during the first half, the company said, including for the drug
substance production of Moderna's COVID-19 vaccine at Lonza's
sites at Visp in Switzerland and Geleen in the Netherlands.
The company had responded by spending 474 million francs on
capex, with the vast majority going towards increasing
production levels. Total spending on its factories is expected
to increase in the second half of the year, Lonza said.
"Our COVID-related collaboration with Moderna on the
mRNA platform has undergone a series of expansions over
the course of H1," said Chief Executive Pierre-Alain Ruffieux
"In April 2021, we expanded our collaboration to establish
three further production lines in Visp. We have already started
work on the installation, and we currently expect to commence
ramp-up in early 2022."
Following a further expansion in the Moderna agreement in
June, a further production line will be added at Geleen, which
will start ramping up production of drug ingredients at the end
of this year, he added.
As well as Moderna, Lonza has won COVID-19 contracts with
AstraZeneca, Capriocor Therapeutics and
Humanigen
"As we look more widely at our contribution through the
pandemic, we have achieved our commitment to deliver for
customers throughout this challenging period by expanding
production and increasing headcount," the CEO said.
($1 = 0.9200 Swiss francs)
(Reporting by John Revill; Editing by Shailesh Kuber and Keith
Weir)
Astrazeneca (AZN)
