AMRI reported solid financial and operating results for the second quarter, ended June 30, 2012, including $2.2 million improvement in net income compared with Q2 2011, and positive free cash flow generated in the quarter. AMRI's large scale manufacturing segment continues to drive new opportunities, bringing the number of products in our pipeline approaching PDUFA dates in the next 12 months to four, and a total of seven with PDUFA dates anticipated in the next 24 months. AMRI's aseptic formulation and fill operations in Burlington, USA, also showed improvement during the quarter.

The contract research and manufacturing company recently streamlined its operations and launched AMRI Smartsourcing in order to better leverage the company's range of global capabilities and technologies. Although AMRI's contract revenue during the quarter declined slightly (2%) from the prior year period, the financial and operating results are stabilizing.

Chairman, President and CEO Thomas E. D'Ambra said, "We continued to deliver solid financial performance as a result of the operational actions taken in 2011. Overall, we believe the improved operational footprint and recent additions to our India and UK operations will enable us to drive profitable growth as we move forward."

Dr. D'Ambra continued, "The global pharmaceutical and biotechnology industry continues to seek innovative partners that can better balance risk, enhance flexibility and deliver business models tailored to their unique needs. Smartsourcing meets these needs head on by providing real choices for our customers without compromising on expectations, timelines or quality. With anticipated growth in global spending on pharmaceutical products resulting from growth in emerging markets, global launches of new molecular entities and the focus on increased access to pharmaceuticals globally, we believe Smartsourcing will drive increased demand for our range of services in the future to help clients effectively address these market trends."

Total contract revenue for the second quarter of 2012 was $42.4 million, a decrease of 2% compared to total contract revenue of $43.5 million reported in the second quarter of 2011. Total contract revenue encompasses revenue from AMRI's Discovery Services, Development and Small Scale Manufacturing, and Large Scale Manufacturing business components.

• Discovery Services contract revenue for the second quarter was $8.6 million, a decrease of 3% from $8.9 million in 2011
• Development/Small Scale Manufacturing contract revenue for the second quarter was $8.1 million, a decrease of 10% from $9.1 million in 2011
• Large Scale Manufacturing contract revenue for the second quarter saw continued positive momentum at $25.7 million compared to $25.5 million in 2011.

Recurring royalties in the second quarter of 2012 were $7.5 million, an increase of 1% from $7.4 million in the second quarter of 2011. AMRI earns royalties from worldwide sales of the non-sedating antihistamine Allegra (Telfast outside the United States), as well as certain OTC forms of Allegra, for patents relating to the active ingredient in Allegra.