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Healthcare

UPDATE 2-Almirall lowers earnings forecast, fearing Spanish drug price moves

(Updates with CFO quotes, share price)

BARCELONA, Feb 24 (Reuters) - Almirall cut its earnings outlook on Monday, sending shares in the Spanish drugs group to their lowest level in more than 18 months, citing the impact of potential government measures in Spain and new competition in the United States.

Although no measures have been announced, Almirall’s finance chief Mike McClellan told Reuters there was a risk that Spain’s new leftist coalition would seek to cut the pharmaceutical product prices or accelerate their substitution with generic ones.

In the United States, the approval since January of a generic competitor to Almirall’s anti-acne product Aczone could also dent its sales growth, he added.

Shares in Barcelona-based Almirall fell 9% after it reported a 36% increase in net profit for 2019 to 106 million euros ($115 million) on higher sales, but said it expected its sales growth to slow down and EBITDA to drop by more than forecast this year.

At 1443 GMT the shares were down 5.2% at 12 euros.

Almirall said net sales would grow in low to mid single-digit terms in 2020 compared to a 12.7% rise to 853 million euros last year. This was below consensus expectations of 12% revenue growth, Credit Suisse Capital Markets said.

CM Capital Markets said the net profit was well below consensus estimates, as well as the guidance for 2020.

Almirall, which reported a 45% jump in earnings before interest, tax, depreciation and amortization (EBITDA) last year to 304 million euros, also said that in 2020 EBITDA would drop to between 260 and 280 million euros.

“But we expect the underlying core business to actually grow in 2020,” McClellan said.

Almirall was open to mergers and acquisitions in Europe, McClellan said, citing France, eastern and northern Europe as places where it wanted to strengthen its position after focusing on the United States and China in recent years. ($1 = 0.9223 euros) (Reporting by Joan Faus and Joanna Jonczyk-Gwizdala; Editing by Nathan Allen, Louise Heavens and Alexander Smith)

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