Albany Molecular's Next Act
This article was originally published in Start Up
Executive Summary
In the fast-growing chemistry services market, Albany Molecular has proven itself a steady and, in recent times, superlative performer. Albany Molecular is capitalizing on its growing revenue stream and strong market performance by building up chemistry capabilities to provide one-stop, albeit specialty, shopping. But the company's growth and above-average margins stem largely from its one major royalty deal, on Allegra--and the company has been spending its time on services, not on at-risk deals.Recent acquisitions position Albany Molecular to provide more proprietary technologies: the key is whether the company's management is willing to take the financial risk of deals in which it has to fund its own early development in order to win an important piece of a product's upside and thus boost it service-company margins.