Merck breaks ranks with Covid-19 downgrade


On the super-Tuesday of pharma first-quarter earnings Merck cut a lonely figure as the only big company to downgrade its 2020 guidance in light of the Covid-19 pandemic. The US giant said revenues could be as much as $2.7bn lower this year. In contrast Novartis and Pfizer played down the full-year financial impact of Covid-19 and stuck by their numbers, largely echoing Sanofi and Eli Lilly last week. Merck is, however, a slightly different beast. Firstly, two thirds of its products are physician-administered, a punishing statistic at a time where patients are advised to remain in their homes and many healthcare facilities have closed their doors to non-Covid-19 ailments. Secondly, it has an animal health division, a business hit even harder than human health. Completing the downgrade triumvirate was foreign currency impact. Despite stepping out from the herd with its financial outlook, Merck joined Novartis and others in predicting a return to "normal operations" by the end of the year. But it is becoming clear with Covid-19 that no one knows what "normal" will look like, so subsequent quarterly results will be scrutinised for any further deviation.

Source: Merck & Co presentation.

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