© Reuters. FILE PHOTO: A logo of the drug and chemical group Merck KGaA in Darmstadt, Germany, January 28, 2016. REUTERS/Ralph Orlowski
By Ludwig Burger
FRANKFURT (Reuters) – Germany’s Merck KGaA forecast on Thursday 2023 profit would fall due to a drop in its electronic chemicals unit and a drop in COVID-related demand for its laboratory supplies from drug and vaccine makers. .
For 2023 earnings before interest, tax, depreciation and amortization (EBITDA), adjusted for exceptional cases, the company “assumes a moderate decline to near stable development” before any currency changes, it said in a statement.
Negative currency effects would likely be an additional 1-4% drag, depending on the maker of pharmaceuticals, laboratory equipment and specialty chemicals.
“In general, Merck assumes that 2023 will be a challenging year. The slowdown in the semiconductor market, the decline in demand related to covid-19 and persistently high inflation will contribute to this,” the family-controlled group said in a statement. release.
Revenue from COVID-19 related laboratory supplies will likely fall to 250 million euros from 800 million last year, it added.
pharmaceutical companies like Pfizer (NYSE:), Modern (NASDAQ:), Gilead (NASDAQ:) and Roche earlier this year warned of a drop in sales of pandemic-related products after making billions from them in the past two years.
Still, Merck CEO Belén Garijo confirmed the German group’s target of 25 billion euros ($26.6 billion) in sales by 2025, up from 22.2 billion last year, citing new product development and a diversified business.
Analysts have said two major trial results, expected by the end of the year, could boost long-term earnings prospects at Merck’s drug business.
One is about a next-generation multiple sclerosis drug candidate, in which Merck is leading a development race with Novartis, Sanofi (NASDAQ:) and Roche, and the other on an experimental head and neck cancer drug known as xevinapant.
Merck also reported fourth-quarter adjusted EBITDA increased 11% to €1.63 billion, slightly below the median estimate of €1.69 billion in a survey of analysts on the company’s website.
($1 = 0.9401 euros)
