Albany Molecular Research, Inc. (NASDAQ:AMRI)
September 9, 2013 08:30 AM ET
Lori Henderson - VP, General Counsel
Thomas D' Ambra - President and CEO
William Marth - Non-Executive Chairman
Greg Bolan - Sterne Agee
Welcome to AMRI Conference Call to discuss the Company's announcement earlier of this morning of an executive leadership change. Today's call is being recorded. All participants are in a listen-only mode. (Operator Instructions) There will be rebroadcast of today's conference available later today and the details are in the press release.
I would now like to turn the call over to AMRI. You may begin.
Good morning. This is Lori Henderson, General Counsel at AMRI. Before I turn the call over to Dr. D' Ambra, the company would like to note that some of our discussion today might be termed forward-looking. Other than historical facts, our statements may contain projections, estimates and other forward-looking statements that involve a number of risks and uncertainties, including those discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the Securities and Exchange Commission on March 18, 2013 and the Company's other SEC filings.
While these statements represent AMRI management's current judgment on the future direction of the Company's business, such risks and uncertainties could cause actual results to differ materially from any future performance suggested herein. AMRI undertakes no obligation to release publicly the results of any revisions to these forward-looking statements to reflect events or circumstances arriving after the date hereof.
I'd like to now turn the call over to Dr. Thomas D' Ambra, AMRI's President and Chief Executive Officer. Please go ahead Tom.
Thomas D' Ambra
Thank you, Lori. Good morning, ladies and gentlemen. Welcome to the conference call segment of AMRI's announcement regarding our executive leadership change. This call is a follow-up to the press release AMRI issued earlier this morning over PR Newswire. Today I announced that I will retire on December 31, 2013 after more than 22 years serving as AMRI's President and CEO and will be assuming the role of Non-Executive Chairman of AMRI's Board upon my retirement.
I am very pleased to report that William Marth, currently AMRI's Non-Executive Chairman has agreed to succeed me and will be joining us on January 1st as our new President and Chief Executive Officer. I am also pleased to welcome Bill to today's call. Bill will provide a few comments and be available at the end of the call for questions.
It is the right time for me to turn over the reins to a new leader and I am truly excited that Bill will be leading the organization, particularly at this stage in AMRI's evolution. Over the past 22 years, we have created a new industry segment and demonstrated our ability to adapt as the pharmaceutical and biotechnology industries have embraced outsourcing while undergoing tremendous change in response to multiple economic, regulatory, political and productivity challenges.
In more recent past we have renewed our focus on core CRO and CMO services, and our business today supports more than 100 clinical and commercial programs for over 300 companies. Our ability to change and adapt to market dynamics is reflected in our financial performance with forecasted revenue expected to approach $250 million in 2013.
AMRI is now strongly positioned as a high quality provider of discovery, early development and manufacturing of APIs and drug product, and is a market leader in an albeit fragmented marketplace. Over the past several months we are seeing encouraging signs of future growth opportunities as new biotech and biopharmaceutical companies begin to ramp up R&D spending again.
Additionally the improving availability of capital in the financial markets bodes well for our customers and the availability of capital to reinvest in the early R&D efforts is likely to improve. And in today's market we believe that increased R&D spending is likely to be focused on strategic outsourcing partnerships. As a high quality partner, AMRI is well positioned to benefit from any increase in R&D efforts by our customers and we remain bullish about the future business climate for AMRI's discovery and early development segments.
This along with our world class manufacturing capability, track record, global footprint, and a number of long term supply agreements ensures AMRI as a provider of choice within the global pharmaceutical and biotech industry. We have the right mix of capability and cost structure in place and our facilities has adequate capacity to meet our growth needs.
Now it's all about building on the good work that has been done and Bill is the right person to take this Company forward. He is well known throughout the industry and has been a member of our board for a little over a year. Bill was appointed to the Non-Executive Chairman role in June of this year at my initiative, knowing that Bill's greater involvement in our activities would help drive our profitable growth plans.
During Bill's tenure as a member of our Board, I've seen firsthand his meaningful contributions to our strategy and his insights on future opportunities both in the U.S. and globally. Additionally he has significant high level connections with existing and potential customers and with Wall Street and will be an asset as we look to strengthen our engagements with customers, investors, and the analyst community.
I believe Bill's drive and significant pharmaceutical industry expertise will take AMRI to the next level. He brings over 20 years of pharmaceutical experience to AMRI, most recently as President and CEO of Teva Americas until he retired in 2012. Bill played a significant role in establishing Teva as a leading specialty pharmaceutical company and being ultimately recognized as a worldwide number one producer of generic drugs.
Bill will bring to the CEO role a wealth of global experience on multiple fronts, and his experience and relationships in the industry will be immensely valuable to AMRI going forward, from leadership in operations to organic and inorganic business development. Importantly, he is uniquely qualified at executing strategic initiatives that have transformed businesses during periods of growth and change.
I am going to pause here and turn the call over to Bill so he can make a few remarks. Over to you Bill.
Thanks Tom. It's great to be here today and an honor to be joining AMRI as President and CEO at this exciting time. I have known AMRI for long time and had the opportunity of seeing the company grow and from a number of prospectives; first from a far as a services provider to the pharma industry, then directly as a customer while at Teva and more recently and intimately as a board member.
I have to say that I have great respect for all that Tom and the leadership team have accomplished over the years. They have built a very successful company, one that has adapted well to the recent changes in the industry and is poised to capitalize on anticipated increases in R&D investment.
I look forward to continuing a tradition of success by executing on the current strategies that have been put in place as well as identifying new opportunities to further build value for AMRI shareholders, employees and importantly the customers and the patients that we serve.
AMRI has demonstrated its adaptability as the pharmaceutical and biotechnology industries have undergone tremendous change in response to multiple challenges. Tom has been instrumental in successfully positioning AMRI as the leader in the providing high quality outsourcing services to the industry, an area of focus that I believe has tremendous promise in the future.
As a conduit into the pharma's pipeline AMRI has truly meet prospective on the pharmaceutical industry. The environments for investment in early stage new drug R&D is improving and AMRI is well positioned to support and benefit from what we believe will be an increase in R&D spending and a greater reliance on outsourcing. AMRI has established itself as a leader in API development and manufacturing and established a beachhead in the important growth area of fill and finish parenteral dosage manufacturing.
With a number of long term supply agreements in place, AMRI is already building on a leadership position as a partner of choice for new small molecule APIs and large pharma companies that may be seeking high quality API manufacturing partners.
I am looking forward to this opportunity and working with Tom and the team on the transition. From my prospective as Chairman, I know we have a great team here and I look forward to working with all of our employees, the Board of Directors, our customers and all key stakeholders as we look forward to take AMRI further.
I will turn the call back over to Tom for some concluding remarks. Tom?
Thomas D' Ambra
Thanks Bill. I am very proud of what we have accomplished over more than 22 years. I have been fortunate to have worked with a large number of current and former colleagues, who have helped create and grow this wonderful organization. As AMRI enters a new chapter I believe the company will continue to grow as a successful global pharmaceutical and biotech services company with Bill at the helm and I look forward to working with him and the leadership team when I reassume my role as Chairman.
As we begin to see improving market dynamics, the evolving business climate will favor the continued growth of strategic outsourcing of high of high value pharmaceutical services. AMRI is at a unique inflection point in its lifecycle and is well positioned to benefit from an anticipated increase in R&D spending and a greater reliance on high quality outsourcing with preferred suppliers. AMRI is that preferred supplier and there is no doubt in my mind that Bill is the right person to lead us forward.
On a personal note I would like to say to all of our customers what a privilege it has been to help each of you succeed and provide better outcomes for the patients to benefit from your scientific endeavors. To our investors it's been a privilege to guide this company to become a respected outsourcing service provider and we appreciate your support as we have executed through the turbulent waters of the last few years. I truly believe that this is just the beginning.
And finally to the employees of AMRI, I personally want to thank you for your ongoing dedication and support. It has been an honor and pleasure to work with you as your President and CEO and I look forward to remaining involved as Chairman while we see the legacy of AMRI grow and prosper under new leadership.
So with that, we will turn the call back over to the operator and we will open up the call to questions.
Thank you. (Operator Instructions). We'll take our first question from Greg Bolan with Sterne Agee.
Greg Bolan - Sterne Agee
So Bill here as we sit today, you guys obviously have access to a descent amount of capital. You are obviously in kind of the mature cycle if you will as it relates to kind of the manufacturing marketplace and obviously if you just think about what the client is asking for today, if we think about the enforcing deal that you had done with Willy as well as other kind of novel type deals, what's the strategic direction? Where are you going to use that or where would you like to use that capital for the next evolution of this company?
Greg, it's a little early to be laying out the complete strategy of the company. We need to work through that as a team. So I would reserve any comment on that at this point in time. But what I would say is that AMRI has built just an absolutely fabulous client list. They work with the best of the best throughout pharma. And what we find is that pharma is increasingly turning to outsourcing for a variety of capabilities and we believe that our relationships with pharma, all pharma, med pharma, generic pharma, the largest of brand pharma allows us the opportunity to sell more of those things to pharma that it's looking for. So I think that's the basis for a strategy and they've done a wonderful job here and we're going to continue doing that.
Greg Bolan - Sterne Agee
And then if you think about just as being a customer of Albany, and then obviously your transition over to the Company as a director and now the CEO role, maybe if you could talk about why did you all use Albany when you were in the customer role and now that you've kind of transitioned to a leadership role within the company, what are the things that really kind of have been -- where you've been pleasantly surprised, where you've been maybe a little bit disappointed or frustrated and maybe walk us through your thought process as a client transitioning into an actual leader of the Company.
Greg, that's another great question because when I think about where AMRI is and the industry is, I would go back and say when I joined Teva back in 1999 and generics were in a good place but they were in a growth phase and we grew the generic division of Teva from about $300 million - $350 million to just under $5 billion in the U.S. and the point is it was about timing, it was about a recognition that it is time for generics in the U.S. market and they were part of the solution for the problems of the burgeoning cost structure within the healthcare system. I think you have a similar situation here with pharma and outsourcing.
Pharma has realized that it's the time to outsource. You don't need to own everything. I know we found that at Teva. We found great partners to work with, of which AMRI was one and we don't need to necessary deploy our capital in such a way as an industry by owning everything. And so allowing people like AMRI to do those type of things for pharma really helps them and there is an increasing awareness and an increasing trust in allowing outsourcing and so that's why I think this is the time to invest in outsourcing, this is the time to add capabilities, this is the time. Pharma has learned that it doesn't need to own everything and that's an important inflexion point.
Greg Bolan - Sterne Agee
And then just I guess maybe one other, I imagine there'll probably be some questions from the investment community regarding this. So go ahead this knock this out now. Bill, are you committed to Albany's three-year plan laid out to investors and as far as revenue growth profitability for the divisions over the next I think through 2015?
Absolutely. We haven't changed the strategy at all. We want to add to this strategy. We're going to review our strategy and hopefully do nothing but improve it.
We will take our next question from Andrew Weinberger.
More to Bill just one quick questions, are you going to be relocating to the headquarters? Are going to be working remotely? Can you just give us some understanding of if you are going to be working remotely, why you feel comfortable that leadership style can be just as successful as being at the office every day?
Andrew, I'm going do whatever it takes to make AMRI successful. So wherever I have to be, I will be to make AMRI successful.
I would now like to turn the conference back over to Dr. D' Ambra for any additional or closing remarks.
Thomas D' Ambra
Thanks Kyle. This concludes our conference call this morning. Thank you again for your interest in AMRI.
Thank you all for your participation. You may now disconnect.
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