Albany Molecular Research Q4 2008 Earnings Call Transcript

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2009-02-09 10:24:10.0

Tags: Molecular Inc., Call Transcript, Earnings, Jefferies & Co., Benefits, Federal Government, Human Resources, Government, Seeking Alpha, Albany Molecular Research Inc.

Question-and-Answer Session

Operator

Thank you. So the question-and-answer session will be conducted electronically. (Operator Instructions). And we'll take our first question from Dave Windley of Jefferies & Company.

David Windley - Jefferies & Company

Hi. Good morning, gentlemen. Nice work on the quarter. Few questions here; on the GE Healthcare contract that you spoke about in call and previously disclosed, is it possible to quantify the margin impact and then I think going back and reading in my notes, some of the disclosure that you put out at the time, I think there is a short reference to amends... certain terms related to pricing and quantity and I wondered, were the amendments for quantity up or down? Thanks.

Mark Frost

Sure, Dave this is Mark. First I'll talk about that. We have provided margin relief to GE in exchange for higher volumes through the life of the contract. So,

David Windley - Jefferies & Company

Okay.

Mark Frost

Most of those higher volumes will actually start in 2010 through 2013. So we will be gaining a benefit on the volume side from that. We have not disclosed the amount of volume.

From a margin stand point, it can roughly create about 2% headwind for 2009. That is on top of actually a 3% margin benefit we provided GE last year. So actually our improvement in Large Scale was actually up 7% versus the 4% that we disclosed overall. So to Tom's point, Dave we believe strongly where we are on our portfolio that we will able to overcome that margin impact, but we felt that was a reasonable trade-off to ensure our supply through the 2013 time period.

David Windley - Jefferies & Company

Okay. While we are on that topic, I think Tom made some mention of opportunities as clients that are approaching filing or waiting for an FDA decision et cetera that could drive some volumes in the Large Scale. Is it possible to be more specific around PDUFA dates or I suspect maybe one or more of those clients are past their PDUFA date and are waiting patiently. Just wondering what the picture was on that?

Thomas D’Ambra, Ph.D.

Dave, this is Tom again.

David Windley - Jefferies & Company

Hi.

Thomas D’Ambra, Ph.D.

We have one client that has a PDUFA date mid year without being more specific.

David Windley - Jefferies & Company

Okay.

Thomas D’Ambra, Ph.D.

 

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