MILAN (Reuters – Italian diagnostics firm DiaSorin foresees lower 2022 revenues and a close 60% decline in COVID-19 sales. The rapid rollout and control of the pandemic is expected to reduce demand and increase the supply. Shares fell more than 11%.

DiaSorin’s molecular division had experienced rapid growth, accounting for 29% sales in 2020.

The company stated that revenue for 2022 is likely to decline 2% compared to the year before. COVID-19 revenues are expected to drop to approximately 150 million euros ($169.9million) from around 370 million euros by 2021.

DiaSorin’s shares dropped as much as 13.6% last Friday as analysts failed to meet their forecasts.

Company presented its business plan for 2025. The company stated its projections were conservative but that they could be better.

At a presentation by CEO Carlo Rosa, he stated to analysts that while we had provided forecasts for 2022 but with limited visibility to the first three quarters of the year, no one knows what’s going to happen with COVID or its variants.

According to the company, an adjusted core earning margin (a measure of operating profits as a percent of revenue) of 35% and 38% in 2022 was forecasted. It is lower than 43% expected for 2021.

We see the adjusted EBITDA margin for 2022 as being significantly lower than what we currently forecast (40 %)”, analysts stated in a note.

DiaSorin bought Luminex Corp, a U.S. competitor (NASDAQ:) Corp in an attempt to grow its molecular businesses and counter a drop in COVID-19 testing demand earlier this year.

The company forecasted revenue and cost synergies of the $20 million acquisition in 2025.

According to analysts Attesa Sanpaolo, “Based upon the 2025 outlined financial goals, we believe that the Luminex Integration could prove slower than originally expected.”

Italy’s pandemic situation is improving, however, due to the spread of the Omicron virus rapidly around the world, COVID-19 was extended and further tightened controls.

DiaSorin projected revenue growth of 24% in 2022, and 10% year-over-year for 2022 to 2025 without COVID.

It also stated that it will launch three molecular diagnostics platforms.

($1 = 0.8832 euros)