Drugs will be the focus on a quiet Friday, with both blue chip AstraZeneca PLC (LON:AZN) and mid-cap Hikma Pharmaceuticals PLC (LON:HIK) due to issue first-quarter numbers.
FTSE 100-listed Astra’s product sales have edged lower in recent years due to the loss of patents on its Crestor (statin) and Seroquel (bipolar) blockbuster drugs.
But the cycle seems to have bottomed out, with product sales climbing slightly in the final quarter of last year, and the company itself is guiding for low single-digital growth in product sales in 2018.
Analysts at Jefferies noted a few weeks ago that the group is “at a turning point” thanks to new drug launches and improving margins.
Strong growth is expected from Astra’s new cancer drugs, Lynparza and Tagrisso, with the latter recently being approved as the go-to treatment for lung cancer patients with certain mutations.
Deutsche Bank expects 1Q sales to reflect these strong launches with total sales of Tagrisso, Imfinzi, Fasenra, Calquence and Lynparza of US$520mln, up 128% year-on-year.
Investors might have had an update on the key MYSTIC lung cancer trial, but the drugmaker recently pushed back the timeline for that so it is unlikely to feature in Friday’s first-quarter results.
Hikma rebound hopes
Meanwhile, investors will be hoping for better news from Hikma after full-year results from the FTSE 250-listed firm saw it slump to a big loss for 2017 after it wrote down the value of the West-Ward Columbus acquisition by more than US$1bn.
For the first-quarter update, analysts at Peel Hunt think the market will focus on any changes to the guidance issued with the 2017 numbers; any advancement on strategy and potential balance sheet deployment by the new CEO; and any comments around generics pricing trends and injectables margins.
They noted that current 2018 guidance calls for branded revenue growth of mid-single digits at constant exchange rates, with Peel Hunt forecasting 5% growth
The company also expects 2018 injectables revenue to be US$750mln-US$800mln, with generics revenue to be around US$550mln-US$600mln.
Significant events expected on Friday May 18:
Interims: AstraZeneca PLC (Q1) (LON:AZN)
Trading update: Hikma Pharmaceuticals PLC (LON:HIK)