Lonza Reports Lower 2024 Sales, But Sees Stronger CDMO Position for 2025

Swiss contract development and manufacturing organization (CDMO) Lonza has reported a slight dip in sales for 2024 but remains optimistic about its future prospects, citing improved performance in key sectors and significant contract signings.

Financial Performance and Market Response

Lonza's 2024 sales totaled 6.57 billion Swiss francs ($7.24 billion), representing a 2.1% decrease from the previous year's 6.71 billion Swiss francs. This figure fell short of analyst expectations, which had projected sales of 6.62 billion Swiss francs for the full year.

Despite the sales decline, Lonza delivered core earnings of 1.9 billion Swiss francs ($2.1 billion), driven by high demand for its CDMO services. The company's mammalian, bioconjugates, small molecules, and cell and gene technologies businesses showed strong performances, helping to offset declines in COVID-19-related activities and softness in other areas.

Strategic Developments and Future Outlook

Lonza's CEO, Wolfgang Wienand, Ph.D., emphasized the company's commercial momentum, highlighting contract signings valued at 10 billion Swiss francs ($11 billion) in 2024. A key strategic move was the completion of Lonza's acquisition of Genentech's large-scale mammalian production facility in Vacaville, California, from Roche. The company has already secured two new customer contracts at this site since the October closing.

Looking ahead to 2025, Lonza has set an ambitious target of 20% sales growth. The company expects profit margins in its CDMO business to reach approximately 30% for the year. This positive outlook is underpinned by the implementation of Lonza's "One Lonza" strategy, announced during an investor update in mid-December. The strategy involves restructuring and reorganizing the CDMO business, with a focus on elevating engineering capabilities and expanding production capacity.

Organizational Changes and Market Position

As part of its strategic shift, Lonza plans to divest its Capsules & Health Ingredients unit "at the appropriate time." This move aligns with the company's goal to become a "pure-play" CDMO, streamlining its operations and focusing on core competencies.

The restructuring efforts also include the implementation of a simplified, scalable organizational structure. These changes are designed to strengthen Lonza's position in the competitive CDMO landscape and capitalize on the growing demand for advanced manufacturing services in the pharmaceutical industry.