Lonza Group (LONN) Morgan Stanley 24th Annual Global Healthcare Conference summary

Industry environment and strategic positioning

• CDMO sector remains attractive with strong demand from both large pharma and biotech, which together account for nearly half of revenue.

• Transition to a pure-play CDMO is progressing, with the divestment of 60% of the Capsules division to be completed by year-end.

• Strategic approach now balances building versus buying assets, with M&A considered but pursued selectively for value creation.

• Upcoming capital markets day in October will provide further updates on strategy and site development.

Regulatory and policy impacts

• BIOSECURE legislation has not significantly altered customer behavior; most companies remain in a wait-and-see mode regarding China exposure.

• Tariffs have minimal direct impact due to the business model; costs are typically passed through to customers, and most pharmaceutical products are exempt.

• Any tariff-related refunds are small and treated as pass-throughs, not affecting the P&L.

Business segment performance and outlook

• Advanced Synthesis saw 28% growth in H1 2026, driven by new capacity in high-margin, complex small molecules and conjugation, but growth will normalize in H2.

• Margins in Advanced Synthesis are expected to stabilize around 40%, supported by constrained global capacity in conjugation.

• Specialized modalities rebounded in 2026 after operational challenges in 2025, with improved margins but still slightly dilutive to group average.

• Integrated biologics is growing at 10% in line with capacity additions, with future growth tied to new assets coming online in Switzerland and the U.S.