West Pharmaceutical Services, based in Exton, Pa., released its first-quarter financials for 2023 that showed organic sales growth of 2.3%. This came despite a 0.5% of net sales drop. As a result, the company that specializes in solutions for injectable drug administration will issue a $0.19-per-share dividend in the third quarter.
Speaking at a conference call, President and CEO Eric Green said the company was “pleased to report we delivered a solid first quarter” and that its overall sales “remain stable, even in a volatile macroeconomic environment.”
The company’s Proprietary Products Segment reported a drop in net sales of 3.0% to $583.1, with organic sales dropping by 0.1% with currency translation impacting sales growth. The big area to take a hit was a decrease in COVID-19-related sales. This also drove a double-digit percent decline in its Biologics market. Alternatively, the Generics and Pharma market units demonstrated double-digit organic sales growth.
For the quarter, operating cash flow was $138.1 million, a drop of 8.7%. Capital expenditures for the quarter were $82.1 million.
Bernard J. Birkett, Senior Vice President and Chief Financial and Operations Officer, indicated that part of that expenditure was that West “opened a new research-and-development lab in Radnor, Pennsylvania.”
The site, which opened in March 2023 with 35 employees, is part of the company’s $400 million global expansion plans. It will support West’s capacity improvements in chemistry, material sciences, and biology, as well as support its products and services for complex sensitive molecules.
Birkett said the site will offer “applied research, advanced design and engineering … and support future R&D into packaging and delivery.” He added, “We’ve made robust capital investment to drive forward additional capacity,” which will enable “billions of units of increased capacity for our components.”
The company also entered into a “sustainability partnership” with the NFL’s Philadelphia Eagles. The biggest and most visible part of this partnership will be West’s Field Goal Fest. The two organizations will plant 20 trees for each successful field goal throughout the season. And at the end of the football season, the team will collaborate on an annual tree-planting event.
In an April statement, Brian Napoli, Senior Vice President of Corporate Partnerships for Philadelphia Eagles, said, “It’s a privilege to team up with West Pharmaceutical Services — a company that shares a passion for giving back to the community and creating more sustainable solutions for our environment. We admire the work West has been doing as a sustainability leader in the healthcare industry and look forward to working alongside them to enhance the impact of our Go Green Program.”
Earlier this year, West announced it was expanding its collaboration with Corning Incorporated. The expansion includes exclusive distribution rights for Corning Valor Glass vials. It also included the launch of West’s first product, West Ready Pack with Corning Valor RTU Vials that use SG EZ-fill technology.
The West Ready Pack with Corning Valor RTU Vials “combines West’s highest quality NovaPure stoppers, Flip-Off CCS (Clean, Certified, Sterilized) seals and Corning’s best-in-class Valor RTU Vials with SG EZ-fill technology into a complete containment solution to help bring parenteral drugs and diagnostics to market.”
That followed a January announcement that West was launching three new products. These included the West Ready Pack with Corning Valor RTU Vials, Daikyo Crystal Zenith 2.25mL Insert Needle Syringe System and FluroTec 5-10mL Cartridge Plunger.
Li Chen, Vice President and General Manager, Biologics at West, stated at the time, “With these innovations, we are addressing the growing market needs for today’s complex and sensitive molecules, including large-volume delivery and a complete vial containment solution that can protect and scale form development through commercialization.”
In addition to its other financial news, West indicated its Contract-Manufactured Products Segment net sales rose by 12.5% to $133.5 million, with organic sales growth of 14.4%. The company repurchased 183,360 shares for $60.1 million at an average share price of $327.90 as part of its share repurchase program.
Although taking a hit with the wind-down of the COVID-19 pandemic, the company is predicting continued growth. Responding to the report, Matt Larew, an analyst with William Blair, viewed this as an indication “that packaging remains a lone bright spot in the broader bioprocessing ecosystem.”
Green emphasized that in his comments as well. He said West offered “unique value to our customers and our end-markets remain stable and strong as our partners continue to produce new drugs and therapeutics.”
