Orchid Pharma · tone and specificity signals across the available quarters.
Language signals
Financial year 26 was a difficult year for Cephalosporin business. It was among the most challenging environments our surplus in franchise has faced in the last 15 to 20 years. In a number of important products and markets, both volumes and pricing were affected with declines of 15 to 20% depending on the product.
While we have seen some improvement in sales over last year, we feel the industry is still facing overcapacities leading to cutthroat competition. Our focus remains on growing volumes with discipline, improving product mix, maintaining strict control over operating costs and progressively strengthening the underlying profitability of the combined platform.
I have changed my thinking about the Chinese. If I find the Chinese selling something cheaper, I would want to believe that their technology is better and I should look at my technology. That's my belief these days.
From a business standpoint, it does not appear that the worst phase of the pricing cycle may now be behind us.
The merger creates a unified anti-infective platform with integrated manufacturing, combined R&D, better capital allocation, capacity rationalization, improved operational efficiencies and cleaner organizational structure. We internally estimate that the merger itself can potentially contribute nearly 1 to 2% margin expansion.
Over the next five years the US business can become an important contributor to both Orchid's top line and the bottom line. Once the 7ACA project is commissioned and the sterile FDF platform is operational, Orchid will become one of the very few integrated sterile Cephalosporin companies globally.