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Epinephrine shot makers have been grappling with supply issues since
Pfizer Inc's Meridian Medical unit, which produces the devices for
companies such as Amneal and Mylan NV, has been hit by a series of
manufacturing problems.
Amneal now expects full-year adjusted earnings before interest, tax,
depreciation and amortization in the range $425 million to $475
million, compared with its prior range of $600 million to $650
million.
SVB Leerink analyst Ami Fadia called the forecast cut more
significant than expected, but said it is probably more realistic.
"(The forecast cut) says that they are either expecting faster
erosion of some of their existing in-market products plus not
expecting new product launches that were baked into guidance for the
year," she said.
The supply disruption has plagued Amneal for over a year, and the
company saw its 2018 combined generics net revenue fall 2.6%, hurt
mainly by lower sales of its epinephrine auto-injector.
Mylan, with its EpiPen, remains the market leader for the emergency
allergy shots, which deliver a dose of epinephrine in the event of
potentially life-threatening allergic reactions to a number of
triggers, such as bee stings or peanuts.
However, manufacturing delays have led to the treatment remaining on
the U.S. Food and Drug Administration's list of drugs in shortage
for more than a year, leaving patients keen for alternatives.
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Pfizer said on Tuesday it anticipated further EpiPen supply
shortages over the coming months.
On Wednesday, Amneal also unveiled a restructuring plan expected to
reduce its total annual cost base by about $50 million.
As part of the plan, it expects to cut 550 jobs by the end of 2020
and shut a manufacturing facility in New York and a packaging
facility in New Jersey.
The company, which had about 6,000 employees as of Dec. 2018,
expects to incur a pre-tax charge of about $10 million to $12
million related to severance benefits
Amneal said it would revise its remaining 2019 forecast metrics when
it reports its second-quarter results on Aug. 8.
The company's shares closed down nearly 36% at $4.36 on Wednesday.
(Reporting by Saumya Sibi Joseph and Aakash Jagadeesh Babu in
Bengaluru; Editing by Maju Samuel and Anil D'Silva)
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