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Corning (GLW) Secures Additional Federal Funds for Glass Vials

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Corning Incorporated (GLW - Free Report) recently secured additional government funds to augment the domestic manufacturing capacity of glass vials for vaccines. In addition to corporate social responsibilities for contributing to the overall cause of vaccination and treatment of COVID-19 patients, the federal funds for the Life Sciences segment are likely to help the company strengthen its position as a leading packaging provider in the healthcare sector.

Corning will receive $57 million from the Biomedical Advanced Research and Development Authority (“BARDA”), which forms part of the Office of the Assistant Secretary for Preparedness and Response at the U.S. Department of Health and Human Services. The BARDA funding is obtained under the White House’s Operation Warp Speed Initiative that aims to develop, manufacture and distribute coronavirus vaccine. With funds worth $204 million received earlier in June 2020, the company has thus secured substantial financial resources to contribute to the surging demand of pharmaceutical glass tubing and vials.

The investment will facilitate Corning to scale up its manufacturing capabilities at three U.S. facilities — Big Flats, NY; Durham, NC; and Vineland, NJ — to bridge the demand-supply gap for glass containers as pharma companies accelerate vaccine production. In particular, Corning will speed up the production of indigenously-built Valor Glass, which is specifically designed for pharmaceutical use with superior chemical durability and minimal particulate contamination for faster and more reliable drug manufacturing and delivery.

Valor Glass showcases specialized glass qualities that make it up to 10 times stronger than conventional borosilicate glass, thereby reducing the probability of damage and breakage during manufacturing and shipping. It enables faster filling and capping that improves manufacturing throughput by as much as 50% compared with conventional filling lines and reduces the time required to manufacture vaccines and therapies. The high-quality standards equip Valor Glass to be more effective than conventional vials for highly specialized formulations that are typically used in next-generation therapies to counter deadly diseases like the coronavirus.

Moving forward, Corning expects to deliver 6-8% compound annual sales growth and 12-15% compound annual earnings per share growth through 2023, while investing $10-$12 billion in RD&E, capital, and mergers and acquisitions. It also plans to expand operating margin and ROIC and deliver $8-$10 billion to shareholders, including an annual dividend per share increase of at least 10%. To achieve its goals, the company expects to add an incremental $3- $4 billion in annual sales and improve profitability by the end of 2023. The company is extending performance under its 2020-2023 Strategy & Growth Framework, and focusing on improving its product portfolio and utilizing financial strength to enhance shareholder returns. Corning’s capabilities are becoming increasingly vital to diverse industries and multiple opportunities support leadership across all of its market-access platforms.  

The stock has gained 111.3% over the past year compared with the industry’s rise of 71.8%.

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