(Reuters) – Medical technology firm Danaher Corp lowered its annual sales growth forecast on Tuesday due to weakness in its biotechnology business, dragging the company’s shares down nearly 5% in premarket trading.
Danaher’s biotechnology business helps companies to manufacture biological medicines, but it has been facing pressures due to a funding crunch in the sector over the last one year.
This has been exacerbated by the collapse of U.S. lender Silicon Valley Bank, a key investment banker in the biotech sector.
“The tightening credit environment contributed to a reduction in demand from emerging biotechnology companies during the quarter,” Danaher said in a regulatory filing.
Revenue from the company’s biotechnology business was $1.86 billion in the first quarter, lower than analysts’ average estimate of $1.92 billion, according to Refinitiv data.
The healthcare company now expects annual adjusted sales in its core operations, which exclude its COVID-19-related business, to grow in mid-single digit, compared with its previous forecast of high-single-digit growth.
Danaher’s COVID-19-related business is likely to face uncertainties as the U.S. government plans to end the COVID-19 Public Health Emergency on May 11.
Washington D.C.-based Danaher’s total revenue fell 7% to $7.17 billion. Analysts on average estimated $7.03 billion, according to Refinitiv data.
Excluding one-off items, the company’s profit was $2.36 per share for the quarter ended March 31, higher than the analysts’ expectations of $2.25 per share.
Danaher shares fell 4.7% to $242.47 in premarket trading.
(Reporting by Khushi Mandowara in Bengaluru; Editing by Shilpi Majumdar)
