Backing out royalties gives about a $60 loss last year. Discount write downs (why?) and about $30 M of that loss is attributable to ongoing operations. My inference from the year end results is they were mainly due to medicinal chemistry and Organichem. The situation will get worse as AMRI stated Organichem will lose major products this year! The overhead for medicinal chemists must be much lower than a manufacturing site which is very hard to close down. The solution proposed is for Organichem to start making generics � this will take time, money and hardly realistic given the competition and cost structure of Indian and Chinese firms! Royalties already down 11% last year and will decrease significantly at the end of the year when I believe the Aventis patents will be found invalid. Since there has not been a significant downsizing (remember many Mt. Prospect employees were transferred to �underworked� Albany with the usual expensive relocation package), I predict much of the cash reserve will be used in a massive downsizing rather than dealing with these issues now and downsizing/divesting unprofitable units. Do I think it will crash and burn? The next few quarterly earnings (losses) will be interesting! Why not make your own mind up!
> Yes, biotech and pharma are the best for investment. But point is AMRI is none of them. AMRI is just a contractor, period.
Pure biopharmas are a gamble. Albany Molecular will be around a while. Pure biopharmas either get bought up or go bankrupt. Albany Molecular has multiple revenue streams with ability to play biopharma game.
The idea of patent expiration is good for R&D outsources like Albany Molecular in long term. So short term Allegra pain brings long term gain.