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 11 May 2020)
Q: What are the financial impacts of coronavirus to Orion?
A: Towards the end of the first quarter of 2020, the COVID-19 pandemic caused significant increase in demand, causing the sales and operating profit in the period to exceed the expected level. This was partly due to product hoarding and stockpiling and partly to an increase in actual demand for products. 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 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. However, this decrease is estimated to be compensated mainly by sales of proprietary products Dexdor® and Easyhaler® whose full-year sales are estimated to exceed previously expected level due to the strong start of the year and the COVID-19 pandemic. For these reasons, Orion still estimates the fullyear 2020 net sales to be at a similar level as in the previous year even though in the first quarter of 2020 the net sales increased clearly.
Orion estimates the full-year 2020 operating profit to be higher than previously estimated due to the strong start of the year and because the full-year sales of proprietary products Dexdor® and Easyhaler®, that are mainly delivered to European markets, are estimated to exceed previously estimated level.
The above-mentioned assumes 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.
Q: Does Orion benefit from coronavirus eg. in the form of increased demand?
A: The coronavirus has increased the demand of pharmaceuticals in general due to which also the demand for some of Orion’s products, especially Dexdor® sedative used in Intensive Care Units and Easyhaler® product family, has increased in Europe.
Q: Does coronavirus have an impact on Orion’s production.
A: For the time being, the production has been operating normally.
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 pandemia 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. If the production and logistics disruptions still continue in April-June, the effects will globally be shown as availability disruptions after summer approximately. 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 but at the moment we are focusing on securing the safety of the patients in the trials.