Swiss drugs industry supplier Lonza will manufacture a number of drug compounds for Britain's Glaxosmithkline, in a sign demand for the Swiss group's  products is recovering.

Lonza said it would support the ongoing development of GSK's biopharmaceutical pipeline by supplying manufacturing capacity for five early stage monoclonal antibodies.

Lonza will initially manufacture clinical trial batches of five compounds currently in Phase 1 and 2 for GSK, it said. The group did not give any financial details of the deal.

The Basel-based group, which has moved away from specialty chemicals to focus on higher-margin pharmaceutical ingredients, had said its business was set to recover further as clients from the pharmaceuticals industry placed more orders.

Lonza has been hit by drugmakers cutting their inventories during the downturn and has reacted by cutting costs. Faced with a tougher road to get their medicines to market, some drugmakers are becoming increasingly cost conscious and prefer to keep some manufacturing in-house rather than turning to companies like Lonza.