Even more difficulties likely lie ahead for Lonza’s (LONN.S) new broom. The $38 billion producer of pharmaceutical components said on Monday that Chief Executive Pierre-Alain Ruffieux will step down and be succeeded by Chairman Albert Baehny until a replacement is identified. Investors are concerned about the group’s new objectives, which are expected later this year, according to a 10% share price decline.
Following a sharp rise in spending, Ruffieux left Lonza, which was intended to wean itself off the boost from producing pandemic vaccinations and enter into growth markets such complicated pharmaceuticals built of human proteins.
The Swiss firm boosted capital investment as a proportion of revenue from 20% to 30% last year after he was named CEO in 2020. However, it also has problems, such lower biotech expenditure brought on by US drug price limits. According to LSEG statistics, analysts predict that between 2023 and 2026, revenues would rise by only 9%, falling short of the group’s historical goal of “low teen” percent growth.
The stock was trading at 32 times its anticipated profits even before Monday’s decline, or about where it was prior to the pandemic rise. Another CEO leaving their position without giving a reason will delay the anticipated progress even further. Written by Aimee Donnellan.
