Lonza reported a solid start to 2025, with strong performance across its contract development and manufacturing organization (CDMO) business and continued recovery in its Capsules & Health Ingredients (CHI) division.
In a qualitative update for the first quarter, the company confirmed its full-year guidance and highlighted robust commercial demand and high utilization, particularly in early-stage CDMO services.
In the Biologics segment, the company pointed to steady momentum across mammalian and bioconjugate platforms. Demand remained strong for both commercial and early-stage offerings. Small Molecules also reported solid execution and uptake, while Cell & Gene Therapy services experienced stable demand, with Lonza noting that it continues to monitor the low maturity of the sector. Bioscience returned to growth, and the CHI division reported improving trends in both its pharmaceutical and nutritional capsules businesses.
The company reaffirmed its outlook for 2025, projecting constant exchange rate (CER) sales growth approaching 20% and a core EBITDA margin nearing 30% across its CDMO business. Excluding the Vacaville site, which is expected to generate CHF 0.5 billion in lower-margin sales, Lonza forecasts low-teens organic CER sales growth. CHI is expected to reach low-to-mid-single-digit CER sales growth, with core EBITDA margins in the mid-twenties.
Development projects remain on track, with GMP activities beginning at the company’s new highly potent API and large-scale mammalian facilities in Visp. Meanwhile, construction continues on the large-scale bioconjugation site in Visp and the commercial-scale aseptic drug product facility in Stein. The Stein site is now expected to begin operations in 2027, a delay from the initial 2026 timeline, due to the later delivery of critical equipment.
Lonza also provided an update on the Vacaville site, acquired in 2023, noting a third long-term customer contract and ongoing negotiations with additional partners. Integration of the site into Lonza’s global network is progressing, with the facility maintaining its quality and execution performance. The company also confirmed it does not expect a material financial impact from potential pharmaceutical tariffs and said its U.S. footprint positions it to support customers if needed.
In a note following the update, William Blair analysts described the release as broadly positive and in line with expectations. They highlighted the new Vacaville contract and reaffirmed confidence in Lonza’s ability to meet its 2028 targets, projecting nearly 20% compound annual growth in adjusted EBITDA over the next four years. Despite the revised timeline for the Stein facility, analysts maintained an “Outperform” rating and cited a favorable risk/reward outlook for the company.