Lonza at Morgan Stanley: Advancing the Pure-Play CDMO Transition, with Focus on Growth and Cash
At the Morgan Stanley Global Healthcare Conference on 15 September 2026, Lonza outlined its transition to a pure-play CDMO: a 60% Capsules & Health Ingredients divestment by year-end, 28% Advanced Synthesis growth in H1, and CapEx normalizing from over 20% to 14%–19% of sales.
On 15 September 2026, Swiss CDMO giant Lonza used the Morgan Stanley 24th Annual Global Healthcare Conference to present a company in transition: core businesses remain in strong growth while the group moves through a period of heavy investment and portfolio restructuring. Management said Lonza is approaching completion of its shift to a pure-play contract development and manufacturing organization (CDMO) model.
Strategically, Lonza expects to complete the divestment of 60% of its Capsules & Health Ingredients division by the end of 2026, leaving the group more concentrated on higher-margin manufacturing services. CFO Philippe Deecke said the company is moving away from its old 'build everything ourselves' approach toward a more balanced buy-versus-build model—seeking assets that can be enhanced with Lonza's technical capabilities and commercial reach rather than acquiring simply to add scale. Lonza also announced a Capital Markets Day in October 2026 at its Vacaville, US site, which is being transformed into a fully CDMO-capable facility.
On financials and segment performance, Advanced Synthesis grew 28% in H1 2026, driven by highly potent small-molecule APIs and bioconjugation services; however, its 48% EBITDA margin is viewed by management as a peak rather than a sustainable run rate, with a more normal level around 40% over time. Integrated Biologics is expected to grow about 10% in 2026, constrained by the timing of new capacity rather than weak demand. Specialized Modalities recovered from 2025 disruptions and is approaching the group's 32%–34% margin range but remains slightly dilutive. Capital expenditure is expected to normalize from above 20% of sales to 14%–19%, supporting better cash generation.
Management noted that CDMO capacity demand remains tight—especially in mammalian manufacturing—and that it has seen little direct impact so far from tariffs or the US BIOSECURE Act, with related costs typically passed through to customers. Lonza's market capitalization is around US$46 billion with a P/E of about 34.7x, reflecting premium market expectations.
About Lonza
Lonza is a Swiss-headquartered global CDMO giant spanning biologics, advanced synthesis (small molecules and bioconjugates), drug product, and cell & gene therapy. Built on the integrated Synaffix platform, it has developed end-to-end ADC capability and continues to expand capacity in Visp, Stein, and Vacaville, serving pharma and biotech customers from early development through commercial manufacturing.