Merck KGaA lowers annual forecast on longer-than-expected hit from COVID-19

Headline results for the first quarter:

Healthcare sales

€1.7 billion ($1.8 billion)

+14.9%

Overall revenue

€4.4 billion ($4.7 billion; forecasts of €4.2 billion)

+16.7%

Profit

€456 million ($491 million)

+141.9%

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

Merck KGaA said the COVID-19 pandemic "only had a moderate impact in the first quarter," but CEO Stefan Oschmann noted that the results "show that we have successfully mastered the crisis so far."

Other results:

  • Rebif: €295 million ($318 million), down 1.4%, with a less pronounced decline as a result of US inventory effects and Russia tender phasing
  • Erbitux: €211 million ($227 million), up 6.1%, with "strong growth" particularly in Europe offsetting weaker sales in China amidst the COVID-19 pandemic
  • Glucophage: €234 million ($252 million), up 29.7%
  • Gonal-f: €167 million ($180 million), down 0.8%, with lower demand in China due to impacts of the COVID-19 pandemic
  • Mavenclad: €123 million ($133 million), up from €43 million ($46 million) in the prior year, boosted by approval in the US last year
  • Bavencio: €33 million ($36 million), up 50.3%
  • Life Sciences: €1.8 billion ($1.9 billion), up 6.5%

Looking ahead:

Merck now expects "a slight-to-moderate organic net sales increase" this year, with the drugmaker anticipating "merely stable organic development." In early March, Merck had guided for "solid organic growth" in sales and earnings on expectations that the COVID-19 outbreak would reach its peak in the first quarter and then subside over the course of the second quarter.

Merck said Thursday that the updated guidance assumes that the COVID-19 pandemic reached its peak at the end of the first quarter in China, with a "significant easing" of the situation in the second quarter. Meanwhile, the company does not expect the outbreak to peak in Europe and the US until the second quarter, normalising by the end of the third quarter.

As such, overall sales are forecast to be between €16.8 billion ($18.1 billion) and €17.8 billion ($19.2 billion), with earnings in the range of €4.35 billion ($4.7 billion) to €4.85 billion ($5.2 billion).

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