February 27, 2020 / 9:13 PM / 3 months ago

Mylan warns of possible drug shortages, financial hit due to coronavirus

(Reuters) - Drugmaker Mylan NV (MYL.O) said on Thursday it expects the coronavirus outbreak to impact its financial results and warned of drug shortages in case of continued spread of the virus, sending shares of the company down 3.6%.

FILE PHOTO: Logo of Mylan Laboratories, a company primarily engaged in the commercialization of generic drugs is pictured in Merignac near Bordeaux, France, September 19, 2019. REUTERS/Regis Duvignau

The outbreak has so far mainly battered China, causing nearly 80,000 infections and more than 2,700 deaths, according to World Health Organization figures. It has spread to another 46 countries, where around 3,700 cases and 57 deaths have been reported.

“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,” Chief Executive Officer Heather Bresch said on an earnings call.

Mylan said it was facing logistical issues, but had not seen problems with production or experienced price increases in active drug ingredients.

Although heavily reliant on China, the company said it was better positioned against the impact of the outbreak compared to its peers due to its diversified supply chain.

“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 it does not see any impact in the near future, but cautioned that continued spread of the coronavirus over the next few months could lead to drug shortages.

The company is set to merge with Pfizer Inc’s (PFE.N) China-headquartered Upjohn unit that houses off-patent branded drugs such as cholesterol drug Lipitor, allowing Mylan to leverage a strong base in Asia.

Pfizer on Thursday also warned that continued spread of the virus could have an adverse impact on its financial results and operations, including its manufacturing, supply chain and clinical trial operations.

Excluding the impact of the Upjohn deal and the outbreak, Mylan expects 2020 total revenue between $11.5 billion and $12.5 billion. Analysts were expecting revenue of $11.92 billion, according to IBES data from Refinitiv.

On an adjusted basis, the company earned $1.40 per share in the fourth quarter, beating analysts’ estimates of $1.28. Total revenue rose 3.7% to $3.19 billion, missing estimates of $3.23 billion.

Reporting by Trisha Roy and Saumya Sibi Joseph in Bengaluru; Editing by Shounak Dasgupta

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