25 March 2020 - Deborah Wilkes
Alliance Pharma and Church & Dwight have issued statements on the potential financial impact of the COVID-19 pandemic.
Alliance Pharma updates on COVID-19
Alliance Pharma says its supply chain is “holding up well” during the COVID-19 pandemic and it “does not anticipate any material supply impact in the current year”.
“Given the fast-moving nature of the pandemic,” stated the UK-based pharmaceutical company, “the impact of the COVID-19 coronavirus on the group's trading in the current year is difficult to forecast but we anticipate that trading will be weighted to the second half.”
Commenting on those products it sells directly, Alliance Pharma noted that it held “typically a minimum of three months of inventory and in some cases more, depending on the level of clinical need”.
Most of the company’s international sales are generated via distributors, which Alliance Pharma said typically held between three and six months of inventory.
Alliance Pharma noted that the COVID-19 situation in China and across the Asia-Pacific region looked to be improving. However, the company said it anticipated that “demand in the Asia-Pacific region, including China, would be lower in the first half of 2020 and then, depending on the speed with which the region returns to normality, begin to recover in the second half”.
Sales in the UK and mainland Europe businesses were expected to be impacted, said Alliance Pharma, but to a lesser extent due to the higher proportion of prescription medicines sold in the region.
Alliance Pharma said it had conducted a number of stress tests on potential trading scenarios in the year ahead and remained “confident of the financial strength and resilience of the group”.
Church & Dwight steps up manufacturing
US-based Church & Dwight is stepping up its short-term manufacturing capacity for healthcare and cleaning products due to the COVID-19 pandemic.
The consumer products company said it was experiencing a “significant increase” in consumer demand for many of its products including Vitafusion gummy vitamins, and Simply Saline and Sterimar nasal hygiene products. The company expects the surge in consumer demand to continue in the second quarter of 2020.
Church & Dwight pointed out that its manufacturing facilities and distribution centres currently remained open and continued to operate.
The company added, however, that “future restrictions on business operations or other developments related to the COVID-19 pandemic could potentially result in significant disruption to its business”.
Church & Dwight said that “out of an abundance of caution” it had drawn USD825 million of its USD1 billion revolving credit facility and would hold the cash on its balance sheet for the foreseeable future. Cash on hand at 31 March 2020 is expected to be approximately USD1 billion.