By Saumya Joseph
(Reuters) – Shares of Amneal Pharmaceuticals Inc plunged 36% to an all-time low on Wednesday after the generic drugmaker cut its 2019 core earnings forecast due to supply uncertainties related to its epinephrine auto-injectors.
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.
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)