SAFC, the custom manufacturing and services business unit of Sigma-Aldrich Corporation ( SIAL ) has entered into an agreement with Seoul, South Korea-based CrystalGenomics to develop active pharmaceutical ingredients (API) for next-generation non-steroidal anti-inflammatory drugs (NSAID).
According to the agreement, CrystalGenomics will deploy SAFC's Pharmorphix pre-formulation technology to study active pharmaceutical ingredients. The services of SAFC will also help in maintaining efficacy and safety of the patients. With the drug development processes becoming complex, the pre formulation services provided by SAFC will enable the pharmaceutical and biopharmaceutical companies to speed up their pipeline projects.
CrystalGenomics is a clinical stage biopharmaceutical company and is developing three clinical stage products. The company's lead candidate is the next-generation NSAID for osteoarthritis, which is in phase 3 development. The company is also developing other products focusing on inflammation, oncology, central nervous system and infection.
Sigma-Aldrich is a leading life science and high technology company. It released its third quarter 2012 results last month. The company posted adjusted earnings (excluding restructuring charges) of 94 cents per share in the third quarter of 2012, below the year-ago earnings of 96 cents. The results were in line with the Zacks Consensus Estimate.
Profit, as reported, fell roughly 4% year over year to $112 million (or 92 cents per share) in the quarter from $117 million (or 95 cents) a year ago. Unfavorable currency reduced earnings per share by 11 cents.
Revenues inched up 2% year over year to $639 million in the quarter, but trailed the Zacks Consensus Estimate of $661 million. Acquisitions added 6% to the growth while foreign exchange swings had a negative impact of 6%.
Sigma-Aldrich expects organic growth to be 3% in 2012, within its earlier low-to-mid single digits growth expectation. The acquisitions of BioReliance and Research Organics are expected to boost sales by 6%. However, unfavorable currency impact is expected to reduce sales by 3%.
Sigma-Aldrich, a close peer of Bayer AG ( BAYRY ), maintains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating. We currently have a long-term (more than 6 months) Neutral recommendation on the stock.