Lonza to simplify structure, exit capsules

Lonza has shared detail of its strategy and new organisational structure at its 2024 investor update. This involves becoming a pure-play CDMO business with three integrated business platforms, as well as exiting from the Capsules & Health Ingredients (CHI) business. 

The ‘One Lonza’ set-up is based around four key initiatives: focusing on the CDMO business, reshaping the operating model, elevating execution in manufacturing and engineering, and expanding through “an impartial approach to buy and build”. The stated aim is to “enhance customer experience, provide scalability for future growth and strengthen Lonza’s multi-modality offering”. 

The current layer of nine business units will be removed and the three business platforms will directly manage multiple technology platforms from Q2 2025: 

* Integrated Biologics, comprising the former Mammalian and Drug Product Services units 

* Advanced Synthesis, combining the former Small Molecules division and Bioconjugates  

* Specialized Modalities, made up of the Cell & Gene Technologies, mRNA, Microbial and Bioscience units 

“The new organisational structure will further enable Lonza to capture growth opportunities through the empowerment of key group functions and improved execution capabilities, including a unified go-to-market approach and an increased focus on excellence in asset construction and operation,” the company said. 

The next steps in the sale of the CHI business will be defined in 2025. No time scale has been outlined. “This move is designed to enhance customer and shareholder value through an increased focus on the CDMO offering, which is Lonza’s core business,” the firm stated. 

The full year outlook for 2024 remains flat in terms of sales growth with a 27-29% core EBITDA margin. The CHI business has seen a weak market this year, offsetting the much strong performance of the CDMO business.  For 2025, excluding CHI, Lonza expects sales growth of nearly 20%, including about CHF 500 million from the Vacaville site acquisition. Organic sales growth will be in the low teens and the core EBITDA margin will be near 30%.