April 23, 2009 / 6:14 AM / 11 years ago

UPDATE 2-Lonza confirms mid-term goal, shares rise

* Confirms mid-term operating profit goal

* Sees 2009 operating profit growth below mid-term average

* Shares rise more than 3 percent

(Recasts, adds shares, analyst comment)

ZURICH, April 23 (Reuters) - Swiss drugs industry supplier Lonza Group Ltd LONN.VX confirmed its mid-term operating profit goal and said demand from pharmaceutical companies had remained robust in the first quarter, boosting shares.

The group, which has moved away from specialty chemicals to focus on higher-margin pharmaceutical ingredients, reiterated in a trading update its target of average operating profit growth of 15 percent to 20 percent until 2013.

By 1048 GMT, shares in the group had risen 3.4 percent to 106.00 Swiss francs, outperforming a near flat Swiss mid-cap index .SMIM.

“Lonza’s performance is overall on track thanks to the good balance of its business portfolio,” Helvea analyst Martin Flueckiger said.

Lonza also said ongoing pipeline deals were under negotiation in both biopharmaceuticals and small molecules.

The group repeated on Thursday that it would not reach its mid-term EBIT growth target in 2009 after weak demand in the industrial and consumer sectors in the first quarter.

In January, the group posted a better-than-expected 39 percent rise in 2008 net profit thanks to strong demand from pharmaceuticals makers and a one-off gain. [ID:nLR341648]

Lonza’s financial situation had not been hit by the crisis as a result of conservative financing, the group said on Thursday, adding its balance sheet structure provided financing and acquisition flexibility.

Lonza’s change in direction towards drug ingredients has helped shield it from problems besetting specialty chemicals companies like Clariant CLN.VX, such as growing low-cost competition from Asia. [ID:nLR281]

The drugs industry is seen as relatively well insulated against the global economic downturn, as healthcare is one of the last areas where consumers are likely to cut spending. (Reporting by Jason Rhodes and Katie Reid; Editing by Dan Lalor and Andrew Macdonald)

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