The company managed to crank up revenues by 9% - 10% on a constant exchange rates (CER) basis – to US$6.23bn in the third quarter from US$5.70bn the year before, despite a 3% (CER:2%) decline in product sales, reflecting the loss of sales for Crestor and Seroquel XR in the US to generic versions of the blockbuster drugs.
READ: AstraZeneca’s severe asthma treatment fails in late-stage study but FDA approval of rare blood cancer drug boosts shares
Profit before tax rose to US$746mln from US$676mln the year before.
Reported earnings per share (EPS) declined to 54 US cents from 80 US cents a year earlier, but this transformed into a 15% (CER:17%) decline in “core EPS” to US$1.12.
For the full year, Astra now expects core EPS to show a percentage decline at the lower end of the guidance range of “low to mid-teens”.
That was enough to send the shares 1.8% higher to 5,082p in a falling market, though by luncthime that gain had been trimmed to 0.5%.
"Our financial performance in the quarter was in line with expectations, reflecting good commercial execution, including strong growth in Emerging Markets with standout sales in China,” said Pascal Soriot, Astra’s chief executive officer.
“It was, however, the raft of news flow and approvals that was most notable. In particular, the positive developments for Tagrisso and Imfinzi in lung cancer and benralizumab and tezepelumab in asthma offset the disappointment of the first readout from the MYSTIC trial,” Soriot claimed.
“The Accelerated Approval for Calquence in the treatment of an aggressive form of blood cancer was an important milestone for a medicine that will be the cornerstone of our presence in blood cancers. Further, the new strategic collaboration with MSD offers significant opportunities to maximise the potential of Lynparza,” he added.
“AstraZeneca is leaning heavily on disposals to prop up results, as patent expiries put product sales on a losing streak, but Astra’s share price is a function of its pipeline more than its current drug portfolio,” claimed Nicholas Hyett, an equity analyst at Hargreaves Lansdown.
“After the disappointment of the MYSTIC trial failure in the summer, more recent results have been good, and there has been particular progress in Oncology and Cardiology. With the group’s growth platforms now accounting for 66% of revenues and growing steadily prospects here look good,” Hyett said.
“There are no guarantees in trials though. Promising drugs that have passed every test can still fail at the final hurdle. With cash flow some way off covering the dividend, the balance sheet is relying on externalisation revenues to take the strain for the time being. If the drugs don’t work, that’ll make it worse,” he concluded.
Shore Capital said it was a positive set of results from Astra with revenues 4% ahead of the consensus, and core EPS 2% above the median forecast of analysts who cover the stock.
The broker said the pharma giant’s growth platforms are becoming increasingly important but revenues from respiratory drugs are strained, as expected.
There were no major pipeline updates, the Shore team noted.
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