Lockdowns imposed to curb the spread of the coronavirus will hit profits in the second three months of the year, US pharma giants Pfizer and Merck have warned.
Merck, which lowered its full-year 2020 profit forecast on Tuesday, said roughly two-thirds of its revenue is made up of drugs that are administered at a doctor’s office, including blockbuster cancer drug Keytruda, and social distancing measures are hitting their sales.
“The company anticipates reduced demand for its physician-administered products while pandemic-related access measures remain in place,” the company said.
Merck also said it was suspending its share buyback program.
Sales of Keytruda jumped 45 per cent in the first quarter to $3.28 billion. Net income attributable to shareholders rose to $3.22 billion, or $1.26 per share, in the quarter from $2.92 billion, or $1.12 per share, a year earlier. Excluding items, Merck earned $1.50 per share, beating estimates of $1.34 per share.
The company now expects full-year adjusted profit of $5.17 to $5.37 per share, down from its prior estimate of $5.62 to $5.77 per share.
Pfizer
Pfizer reported a 12.4 per cent drop in first-quarter profit on Tuesday, partly hurt by a drop in sales its off-patent pain treatment Lyrica.
The largest US drugmaker warned of a hit to second-quarter results also as lockdowns affect the rate of new prescriptions for its medicines and vaccinations.
Net income attributable to shareholders in the first quarter fell to $3.4 billion, or 61 US cents per share, from $3.88 billion, or 68 cents per share, a year earlier. Revenue at the company, which is set to spin off its off-patent branded drugs business and combine it with generic drugmaker Mylan, fell 8.3 per ceng to $12.03 billion.
The company said it continues to expect full-year earnings in the range $2.82 to $2.92 a share as it expects an improvement in disrupted business activity in the second half of the year.
With a collaboration with Germany’s BioNTech, Pfizer is among the many drugmakers in the race to develop a vaccine to end the Covid-19 pandemic. The companies’ German trial is among the four studies worldwide to begin human testing of their vaccine candidates.
The drugmaker said it saw an increase in demand for its pneumonia vaccine Prevnar, some anti-infective products as well as certain sterile injectable products used in the treatment of severely sick Covid-19 patients in the first three months of 2020.
Excluding items, it earned 80 cents per share, beating analysts’ estimate of 73 cents per share, according to Refinitiv data. – Reuters
