Drug shortages play role in growth at West Pharmaceutical
Drug shortages usually stem from plant closures and can only mean bad news for patients and for whichever manufacturer is the target of FDA concerns. But for some companies those problems can mean more business, and supplier West Pharmaceutical Services ($WST) has been one such beneficiary.
In reporting higher sales and earnings for its fourth quarter, the Exton, PA, company said that demand was fueled by customers who were working to "relieve market shortages of certain critical injectable drugs" and those who were building their inventories because of "more conservative risk management strategies." That helped West, which makes packaging and drug-delivery systems, to increase sales nearly 9%. It said it expects to grow revenue by 6% to 8% next year.
With demand growing, the company is building new plants, expanding in emerging markets. It has wrapped construction of a packaging plant in China that should be pushing out product in the second quarter of this year. It also has started on its first packaging plant in India, which kicks off a 10-year plan to expand there. The India complex in Sri City, India, will eventually grow to 37,700 square meters. The plant will put West closer to customers who are themselves building expanding manufacturing in the region, and so cut lead times and costs.
Warwick Bedwell, West's president of pharmaceutical packaging systems in the Asia Pacific region, told FiercePharmaManufacturing when the plant was announced that besides demand from India and China, it is getting more orders from clients in South Korea and Australia with its biotech base. It expects growth in Indonesia and Vietnam to keep the momentum growing. "Western pharmaceutical multinationals are moving their production to Asia to satisfy the local demand, but local players are also looking for new opportunities across Asia and in the United States and Europe," Bedwell said.
- here's the company release
West tapping growth in India, Asia
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