(Reuters) – Merck & Co Inc warned of a $2.1 billion hit to its 2020 revenue on Tuesday as social distancing due to the COVID-19 pandemic is expected to hammer sales of medically administered drugs including its blockbuster Keytruda treatment.
Roughly 66% of its revenue comes from such drugs that need a patient to visit a doctor’s office, the company said, adding that the estimate included $400 million in losses at its animal health business.
“The company anticipates reduced demand for its physician-administered products while pandemic-related access measures remain in place,” Merck said in a statement.
The company also said it was suspending its share buyback program.
However, Merck beat analysts’ estimates for profit and sales in the first quarter on strong Keytruda sales.
Merck said it saw a slight benefit as customers stocked up on some of its products, including animal health drugs as well as its Gardasil vaccine to prevent cancers associated with the human papillomavirus
Sales of Keytruda jumped 45% in the first quarter to $3.28 billion. Total sales grew 11.5% to $12.06 billion, beating estimates of $11.46 billion, according to IBES data from Refinitiv.
Net income attributable to shareholders rose to $3.22 billion, or $1.26 per share, in the quarter from $2.92 billion, or $1.12 per share, a year earlier.
Excluding items, Merck earned $1.50 per share, beating estimates of $1.34 per share.
The company now expects full-year adjusted profit of $5.17 to $5.37 per share, down from its prior estimate of $5.62 to $5.77 per share.
Shares of the company are down 4.25% just after the bell to $80.41.
Reporting by Manas Mishra in Bengaluru; Editing by Shinjini Ganguli and Anil D’Silva.