Another major company expecting to take a hit because of the coronavirus outbreak across the world is Drugmaker Mylan NV. The company said that it expects the outbreak to impact its financial results while also warning of shortages of drugs in the eventuality that the epidemic continues to spread. This brought down the shares of the company by 3.6 per cent.
Up till now, most of the deaths and infections because of the coronavirus have taken place in Mainland China with almost 80,000 people there being infected and deaths of almost 2,700 being reported, as per data announced by the World Health Organization. The virus infection has also spread to at least 46 more countries with more than 3,700 people getting infect and 57 of them dying at the hands of the deadly virus.
“Our business exposure in China specifically is limited. However, given the global nature of our supply chain, operations and businesses, our results could potentially be impacted,” said Chief Executive Officer of the company, Heather Bresch, during an earnings call.
While not experiencing any issues with manufacturing with as well as with price increases in active drug ingredients, Mylan however said that it was facing logistical issues.
While claiming that its diversified supply chain made it better equipped to deal with the impact of the coronavirus outbreak compared to some of its peers, the company admitted that it is over reliant on China.
“The whole industry is in one way or other way connected with China, but you would expect us to be much better placed,” President Rajiv Malik said.
Mylan said that if there is an unabated continuation of the virus otubreak over the next few months, it could lead to a shortage of drugs, but added that it does not see any impact on drug availability in the near future.
Under a recent deal, Mylan is scheduled to merge with Upjohn, the China-headquartered unit of Pfizer Inc, – a company that houses off-patent branded drugs such as cholesterol drug Lipitor. The deal will give an opportunity for Mylan to take advantage of a strong base in Asia.
There can be an impact on its financial results and operations, including its manufacturing, supply chain and clinical trial operations, if there was a continuation of the spread of the virus outbreak, Pfizer also warned on Thursday.
Mylan expects that for 2020, it total revenue will be between $11.5 billion and $12.5 billion excluding the impact of the Upjohn deal and the coronavirus outbreak impact. According to IBES data from Refinitiv, analysts were expecting revenue of $11.92 billion.
For the fourth quarter of last year, the company earned $1.40 per share on an adjusted basis which beat market expectations of $1.28 a share. Total revenue rose 3.7% to $3.19 billion, missing estimates of $3.23 billion.
(Adapted from NYTimes.com)