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Healthcare

UPDATE 2-Croda pins Life Science sales boost on Pfizer vaccine deal

* 2020 overall profit slips, but life sciences unit jumps

* Shares up nearly 2% in early trading

* On Pfizer deal, Croda CEO says raising capacity to meet demand (Adds CEO comments, share move)

March 2 (Reuters) - Croda is expanding manufacturing capabilities at two sites that make additives used in Pfizer’s COVID-19 vaccine, while the speciality chemicals group raised its sales forecast from its five-year contract with the drugmaker.

The London-listed company said on Tuesday its contract with Pfizer will boost sales by at least $125 million this year, $25 million more than Croda’s previous prediction.

Croda, whose shares hit a record high when the Pfizer deal was announced last November, is supplying the U.S. company with substances that help with the storage and long-term administration of the vaccine.

Chief Executive Steve Foots said the purity of lipids supplied by Croda helped to bring the vaccine’s storage temperature to refrigeration levels from ultra-cold conditions.

“Lipid purity plays a part, it is not the only part. What we had to do was improve the purity levels at speed whilst we’re scaling it. We have done that extremely well,” he said.

Vaccine makers have been shoring up their supply of lipid molecules, a critical raw material in “messenger RNA” vaccines that help to deliver the genetic RNA material into cells.

Croda, which has spent $14 million to support the contract, said it was doubling the capacity of its U.S. site, while quadrupling a UK site to meet demand.

The company also announced on Tuesday a 25-million-euro buyout of France-based natural ingredients maker Alban Muller, and said it was looking at acquisitions to accelerate its strategy in the life science and consumer markets.

Croda’s life sciences business had a record year in 2020, with profit up by 21%.

Group adjusted profit fell nearly 7% in 2020 to $417.2 million, dragged down by the mainstay personal care division, which has taken a hit as coronavirus lockdowns affected demand for cosmetics.

“While continued COVID-19 restrictions make the near-term outlook for elements of our consumer care and performance technologies sectors difficult to predict, 2020 sales exit rates were encouraging,” Croda said.

“Life Sciences is expected to remain strong.” (Reporting by Jasmine I S and Muvija M in Bengaluru; Editing by Aditya Soni and Jane Merriman)

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