Then and Now: Patheon Incorporated
Patheon Inc. is a pharmaceutical Contract Development and Manufacturing Organization. This means that it manufactures pharmaceutical products on contract for various biotechnology and pharmaceutical companies. Patheon mainly produces prescription and over-the-counter medicine. They have a clientele of over 400 companies spread across the United States. Patheon was formed as a result of a merger between Canadian drug maker Patheon Inc. which was JLL-controlled at the time and Dutch Vitamin manufacturer Royal DSM. Following this deal, Royal DSM had a 49% stake in Patheon.
The company went public on July 21st, 2016. On the day of its release, Patheon sold 30.49 million shares at $21 per share. This price was in the upper half of Patheon’s shares expected price range which was $19 to $22. The issuance came up to a total of $640 million. At the time of its release, Patheon’s IPO was the third-largest 2016 had seen. The IPO was led by JPMorgan Chase & Co., Morgan Stanley, Jeffries Group LLC and UBS Group.
Investors were greatly interested in Patheon’s IPO due to increased profit in the previous fiscal year, increased sales as well as the company’s growth. The company posted a net income of $138.4 million on sales totaling to $1.8 billion in the fiscal year that ended on October 31st. This revenue was compared to losses of $119 million on a revenue of $1.5 billion in 2014’s fiscal year.
When interviewed, Patheon’s Chief Executive Officer said, “We have been positioning ourselves to come out, and we are one of those fortunate companies that could.”
The first days of Patheon’s trade in the market were very successful. On August 1st, the company’s stock reached a high of $25. The company has close to 700 of their manufactured products in the market and over 400 clients. These customers are located in over 70 different countries. The list, however, continues to grow. This is because the products manufactured by Patheon will always be in constant demand. Notably, the company does not make any of its products and spent an estimated $15 million in research in 2015’s fiscal year. That is quite low for a company of its magnitude.
As of February 28th, Patheon’s stock was valued at $31.50. This was a 1.99% decrease from the previous day. Its all-time high was achieved on 23rd February this year at $32.47. Patheon’s lowest aftermarket value was $24.60 on October 28th last year. The company had a formidable decrease in its stock through October last year but made a comeback in November. It has been gaining in the markets since then, with a general upward trend on its graph.
In recent expansion strategies, Patheon has acquired an API manufacturing company from Roche Holdings Inc. Additionally, Patheon also entered a multi-year supply arrangement with the enterprise.
Hopefully, Patheon Inc. will continue to a steady growth curve. There are currently no indicators of a significant drop in this company’s stock. Close half a year away from realizing its one-year mark in being publicly traded, all we can say is so far so good.