A Tyneside pharma firm expects to see significant sales growth in the coming year, after developing a new strategy in response to the loss of a key project.
Dudley-based Shasun Pharma Solutions, which makes pharmaceutical products and fine chemicals, has seen its sales fall since 2013, following an order reduction from a major customer.
Latest accounts for the Indian-owned healthcare business, for the year ended March 2015, show turnover has declined by 20% year-on-year, from £28.78m to £22.9m, and the previous year’s small profit of £8,000 has become a loss of £2.6m.
The company, which employs 272 people, has put a new strategy into action which has seen it diversify into new areas, a move which promises to be reflected in significant growth in the next accounts.
In notes accompanying the accounts, directors said: “2013-2014 registered a disappointing loss of a key project within the portfolio. The unexpected reduced performance of the product in the market place resulted in a sharp reduction of product demand by the customer.
“During 2014-15 the company has continued to focus on rebuilding its product and customer portfolio.
“The company strategy, developed during 2013-14 was fully implemented in 2014-15.
“This involved focus in the areas of animal health, controlled drugs, technology application and potent compound manufacture.
“Good market interest and commercial traction has been observed in all the focus areas. 2015-16 should see significant sales growth and improved financial performance with a much more diverse and robust product portfolio.”
While sales have declined, the company said “considerable progress” has been achieved in winning new business and enhancing its assets to accommodate contract wins.
Investments in research and development were also significantly higher than previous years as the firm forged ahead with developing processes for commercialisation.
R&D expenditure of £4.49m was written off the profit and loss account, and an R&D expenditure credit of £840,000 was received during the year.
A record number of 22 new customers was added to the firm’s portfolio, nine launched products were secured as well as 14 pre-launch products.
Directors added: “The company already has purchase orders or firm customer commitments in excess of 70% of its 2015-16 sales budget, which represents an all-time record for the business at this point in the year.
“Based upon its current order position, the significant sales potential of a number of new products currently under development and a large portfolio of new business opportunities being pursued, the directors are confident that the company can deliver on its long term growth strategy to increase sales and profitability.”