Switzerland based CDMO, Lonza, is simplifying its organizational structure to focus on the CDMO business, expanding it through a buy and build approach. The firm has also decided to exit the Capsules & Health Ingredients (CHI) business at the appropriate time.
“The strategy reflects our ambition to become a pure-play CDMO business,” said Wolfgang Wienand, CEO, who joined the firm in April. “This will allow us to achieve and maintain leadership across modalities with high therapeutic and commercial value, while pioneering the manufacturing technologies of the future.”
The organizational structure for the CDMO business will evolve from three divisions with nine underlying business units, to a simplified ‘One Lonza’ set-up with three integrated business platforms. The simplified organization has been designed to enhance customer experience, provide scalability for future growth and strengthen Lonza’s multimodality offering.
- Integrated Biologics will advance Lonza’s integrated offering and will comprise Mammalian and Drug Product Services.
- Advanced Synthesis will combine hybrid chemistry and biology solutions and will comprise the former Small Molecules division and Bioconjugates.
- Specialized Modalities will pioneer and scale cutting-edge technologies including Cell & Gene Technologies, mRNA, Microbial, and Bioscience.
The new structure will be operational from Q2 2025.
Through this change, Lonza plans to capture growth opportunities. It will also elevate the importance of bolt-on M&A and take an impartial view on organic and inorganic opportunities for future growth.
Lonza has confirmed its Full-Year Outlook 2024 at flat constant exchange rates (CER) sales growth and a CORE EBITDA margin in the high twenties (27-29%). The market softness in the Capsules & Health Ingredients business in 2024 is expected to be offset by the strong performance of the CDMO business, allowing Lonza Group to deliver on its overall growth and margin outlook for the current year.
For 2025, Lonza (excluding CHI) expects CER sales growth to approach 20%, including a sales contribution of around half a billion CHF from the Vacaville site acquisition, and low teens organic CER sales growth. The CORE EBITDA margin will approach 30%.
For CHI, Lonza expects low-to-mid single-digit CER sales growth for 2025 and a CORE EBITDA margin in the mid-twenties. Beyond 2025 Lonza expects low-to-mid single-digit CER sales growth and a gradual return to previous CORE EBITDA margin levels approaching and then exceeding 30%.