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 22 October 2020)
Q: What are the financial impacts of coronavirus to Orion?
A: Due to the COVID-19 pandemic the whole year international sales of Dexdor® will be clearly higher than expected at the start of the year. The demand spike of generic prescription drugs and self-care products in March has levelled off during the year as expected but the full-year sales of some products, however, will be higher than expected at the start of the year. Additionally, the risk of COVID-19-induced lower product availability in 2020 has reduced significantly. Due to these reasons, among others, Orion estimates the full-year 2020 net sales to be at a similar level as in 2019 or slightly higher than in 2019.
Mainly due to the COVID-19 pandemic the full-year operating expenses of Orion will be lower than estimated earlier. Due to the net sales that will be higher than estimated at the start of the year, favourable sales margin structure of the sold products and lower than estimated earlier operating expenses, Orion estimates the full-year 2020 operatig profit to be higher or clearly higher than in 2019. In addition to prices and product portfolio, the sales margin structure is affected by the cost level, which is improved, for example, by the high capacity utilisation rate of production facilities and the reduction of scrap and inventory write-offs.
The above-mentioned 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 Interim Report 1-9/2020.
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 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