Lonza Shares Surge on Strong Quarterly Performance and Upbeat Outlook

Lonza Group has delivered a powerful third-quarter update for 2025, reinforcing market confidence by maintaining its full-year guidance. The Swiss life sciences company demonstrated resilience across its business segments, with its contract development and manufacturing organization (CDMO) division continuing to drive growth while capsules and health ingredients (CHI) operations show signs of recovery.

Despite facing anticipated foreign exchange headwinds, Lonza's underlying business momentum remains robust. The company confirmed that currency fluctuations, primarily due to a weaker US dollar, are expected to negatively impact both revenue and CORE EBITDA by approximately -2.5% to -3.5% for the full year 2025.

However, the company's diversified global footprint and strategic financial hedging have positioned it to minimize margin erosion. Through a combination of natural hedging across its manufacturing facilities and structured financial programs, Lonza has effectively contained the potential damage from external currency volatility.

CDMO Division Accelerates Growth Trajectory

The contract development and manufacturing organization business emerged as the standout performer, recording substantial expansion during the third quarter. Both integrated biologics and advanced synthesis units contributed significantly to this upward trend, with sustained strong demand for large mammalian assets.

Lonza's strategic acquisition of the Vacaville facility in the United States has further amplified this positive momentum. During the quarter, the company secured another major commercial contract for this site. The Vacaville operation is projected to contribute approximately CHF 500 million to the top line in 2025, reaching the upper end of expectations while delivering better-than-anticipated margins.

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Reflecting this strengthened performance, management has refined its full-year 2025 CDMO outlook. The company now anticipates constant currency revenue growth of 20-21%, up from the previous guidance of "approximately 20%." Similarly, the CORE EBITDA margin projection for the CDMO segment has been upgraded to 30-31%, compared to the earlier "close to 30%" expectation.

Health Ingredients Segment Rebounds as Divestment Progresses

The capsules and health ingredients division returned to growth in Q3 2025, matching management expectations. This recovery has been primarily fueled by increased volumes within the pharmaceutical capsules business.

Concurrently, the planned divestment of the CHI operations continues according to schedule. Company officials emphasize that the strategic exit process has not disrupted the segment's operational improvement. This deliberate portfolio refinement aims to sharpen Lonza's strategic focus on its core CDMO activities, which represent the company's primary growth engine.

Key Highlights from Q3 2025 Performance:
* Robust results across both CDMO and CHI business units
* Full-year guidance confirmed for all operating segments
* CDMO revenue growth outlook raised to 20-21% at constant exchange rates
* CHI division returns to positive growth trajectory
* Currency headwinds projected between -2.5% and -3.5%

With confirmed financial targets and strategic realignment toward its high-margin CDMO operations, Lonza appears well-positioned to maintain its current momentum through year-end.