Orion Investor Relations have received several questions related to the coronavirus (COVID-19) pandemia and its impacts on Orion. We have listed here answers to some frequently asked questions. (Published on 27 March 2020, last updated on 17 July 2020)
Q: What are the financial impacts of coronavirus to Orion?
A: In March and April of 2020, the COVID-19 pandemic caused a significant increase in demand, as a result of which the company's net sales and operating profit for the first half of 2020 clearly exceeded the forecast levels. This was partly due to product hoarding and stockpiling and partly to an increase in actual demand for products. In May and June, the sales levelled off, and in many product groups they were weaker than in the previous year.
As regards Specialty Products unit, the company estimates the sales growth that was caused by the spike in demand in the early part of 2020 to level off during the year. The sales of generic products in Orion‘s portfolio manufactured by other pharmaceutical companies are estimated to be slightly lower than in the previous year due to weaker than normal availability in the second half of the year caused by the COVID-19 pandemic. Orion still estimates the full-year 2020 net sales to be at a similar level as in the previous year even though in the first half of 2020 the net sales clearly increased.
Orion expects the overall operating profit for 2020 to be higher than previously estimated due to the strong first year-half and to the fact that the full-year sales of Dexdor® and some other proprietary products are now expected to exceed the previously estimated levels, while the operating expenses are expected to be slightly lower than forecast.
The above-mentioned is based on the assumption that during 2020 Europe will not experience a significant second wave of COVID-19 that would materially increase the demand of Orion products. In addition, the outlook is based on the assumption that Orion‘s own production can continue normal operations despite the COVID-19 pandemic. This requires that Orion continues to succeed in protecting its employees and employee absence rates do not significantly increase, that personal protective equipment, starting materials, intermediate products and materials are available and that the logistics chains are sufficiently functional.
The financial impacts for 2020 are handled in Orion’s Half-Year Financial Report 2020.
Q: Does Orion benefit from coronavirus eg. in the form of increased demand?
A: The coronavirus increased the demand of pharmaceuticals in general in March and April. To Orion this showed as increased demand especially for generic prescription drugs, Dexdor® sedative used in Intensive Care Units and Easyhaler® product family. After this the demand in May and June has levelled off in all product categories.
Q: Does coronavirus have an impact on Orion’s production.
A: For the time being, the production has been operating normally. The precautionary measures introduced in the spring to secure the continuity of the production continue for the time being at all production sites.
Q: Are there any risks to Orion related to the coronavirus situation?
A: Coronavirus has caused disruptions to the global supply chains of pharmaceuticals. The pandemic has restricted the operation of facilities producing pharmaceutical raw materials and pharmaceuticals in different parts of the world. In addition, the restrictions of air traffic and marine ports worldwide as well as other movement restrictions pose a challenge to logistics. The sales of generic products in Orion‘s portfolio manufactured by other pharmaceutical companies are estimated to be slightly lower than in the previous year due to weaker than normal availability in the second half of the year caused by the COVID-19 pandemic. Orion’s own production may be disrupted due to the above-mentioned reasons or due to significant increase in employee absence rates.
Q: Does the coronavirus have an impact on Orion’s clinical development projects?
A: Some projects may be delayed due to the situation and we have experienced some slight delays already. At the moment we are focusing on securing the safety of the patients in the trials