(Reuters) -Drugmaker Viatris beat Wall Street estimates for first-quarter profit and revenue on Thursday, helped by sales of its branded drugs in China.
The company’s shares, which rose over 4% in premarket trading earlier after its pain drug and birth control patch succeeded in late-stage studies, were up 1.4%, after Viatris reported a goodwill impairment charge of $2.9 billion.
Viatris attributed the charge to “a sharp and sustained decline in its share price and significantly increased uncertainty and volatility in the geopolitical and economic environments.”
When adjusted for divestitures, the company’s first-quarter revenue fell 2% to $3.25 billion, but still came ahead of analysts’ estimate of $3.24 billion, according to data compiled by LSEG.
Sales of its generic drugs were hurt after the U.S. Food and Drug Administration restricted imports of 11 products from its facility in Indore, India due to violations found during an inspection.
Revenue in its bigger branded drugs unit, under which the company sells anti-anxiety medication Xanax and Yupelri for lung disease, rose 3% to $2.12 billion, reflecting expansion in emerging markets, and strong growth in Greater China and developed markets.
The company maintained its annual revenue forecast at $13.5 billion to $14 billion, but raised its per share adjusted profit outlook by 5 cents at the mid point, including the impact of share repurchases.
The forecast, however, did not include “any potential impact of future tariffs and trade restrictions as they cannot be reasonably forecasted,” the company said.
As a result of the impairment charge, Viatris swung to a quarterly loss of $2.55 per share for the quarter ended March 31, from a profit of 9 cents a year ago.
On an adjusted basis, it reported a profit of 50 cents per share, compared with estimates of 49 cents.
Pittsburgh-based Viatris was formed by the merger of Mylan and Pfizer’s Upjohn business in 2020.
(Reporting by Puyaan Singh in Bengaluru; Editing by Shailesh Kuber)
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