Chesapeake Biological's loss grows to $392,000 Revenue declines after a top client goes elsewhere

Earnings

July 25, 1998|By Mark Guidera | Mark Guidera,SUN STAFF

Chesapeake Biological Laboratories Inc. said yesterday that its net loss widened to $392,000, or 7 cents a share, in its first quarter ended June 30, compared with a $75,000 loss, or 2 cents a share, in the first quarter last year.

The company said revenue also declined for the first three months to $1.1 million, compared with $1.7 million in the year-earlier quarter.

CBL's president, John C. Weiss III, said the increased loss was expected.

The Baltimore-based provider of contract manufacturing and testing services to the biotechnology and pharmaceutical industries attributed most of the loss to the fact that a former top customer, Allergan Inc., terminated its use of CBL's services, Weiss said.

Allergan, a California-based medical products company, shifted production of its surgical eye lubricant, Vitrax, to a plant it owns in Ireland.

The contract had provided CBL with $2 million to $3.5 million annually in sales.

Also contributing to the first-quarter loss, the company said, were costs associated with the construction and opening of its new manufacturing plant in downtown Baltimore.

Weiss said CBL, which employs 90, is excited about the potential for generating new business at the new 71,000-square-foot, state-of-the-art production facility and headquarters in Camden Industrial Park. The company also has a plant in Seton Industrial Park.

The company said it expects to begin generating new revenue from its new manufacturing facility this year now that a Food and Drug Administration inspection of the new facility has been completed. "We've made an investment in the future in this plant; it came in on budget, and now we've got the FDA approval to move ahead," said Weiss.

He confirmed that the company is in negotiations with several potential customers for production contracts at the new facility.

In the last two weeks the company reported landing two new customers, ImmuLogic Pharmaceutical Corp. and Pangaea Pharmaceuticals Inc.

Under the deal with ImmuLogic, of Waltham, Mass., CBL will manufacture experimental vaccines being developed for cocaine and nicotine addiction.

Privately held Pangaea, of Cambridge, Mass., signed an agreement to have CBL manufacture its experimental drug for treating a cervical condition related to human papillomavirus infection.

Pub Date: 7/25/98

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