AstraZeneca reports better than expected profit on higher cancer drug sales

By Ashleigh Furlong

  AstraZeneca Plc reported better-than-expected profit and revenue in the fourth quarter and forecast further gains, helped by the UK drugmaker’s blockbuster cancer drugs. 

Earnings per share excluding some items surged to $2.09, Astra said Thursday, higher than the $2.04 estimated by analysts surveyed by Bloomberg. Revenue also exceeded estimates and the stock rose the most in more than nine months.  

Chief Executive Officer Pascal Soriot is reaping the rewards of doubling down on the competitive market for cancer medicines, with drugs like Enhertu and Tagrisso fueling growth. The report reassured investors about Astra’s prospects in a year when the company will release research results for seven new medicines, analysts said.  

 

Before Thursday’s turnaround, investigations in China battered the drugmaker’s share price. 

Astra gave an estimate of some of the potential damage alongside earnings. The company received an appraisal opinion from the Shenzhen city customs office in January regarding suspected unpaid import taxes that likely relates to the cancer medicines Imfinzi and Imjudo. The drugmaker said it could be fined as much as $4.5 million. A similar issue with Enhertu could have a bigger impact, Soriot said at a press briefing. Astra continues to cooperate with Chinese authorities. 

“We see the update on China illegal import litigation as a small positive step to addressing investor fears on China risk,” Matthew Weston, an analyst at UBS, wrote in a note.  

New Medicines 

Astra said revenue will likely grow by a high single-digit percentage this year and core earnings per share by a low double-digit percentage at constant currencies, it said. 

The forecast underpins consensus expectations and allows the focus to shift to the company’s pipeline, James Gordon, an analyst at JPMorgan, wrote in a note. 

Astra is expecting late-stage readouts from seven new drugs this year, including an oral breast cancer therapy called camizestrant, as well as new indications for existing medicines like Enhertu.  

The shares rose as much as 5.4% in London, bringing their gain since the start of the year to 11%. Rival GSK Plc boosted its long-term sales forecast a day earlier, also buoying the stock.  

Astra anticipates significantly increased growth in the coming years, aiming for $80 billion in sales by the end of the decade, in part thanks to its cancer-drug portfolio.  

UK Spat 

In the UK, Astra has also been involved in a public spat over the level of state support for a proposed new vaccines factory near Liverpool. The company abandoned plans for the facility after failing to reach agreement with the government.  

Sales in China fell last quarter, with the decline primarily due to low rates of seasonal respiratory viral infections and the impact from year-end hospital budget dynamics. 

Mainland authorities are also investigating some of Astra’s current and former employees for alleged breaches of laws around drug imports, data privacy and insurance reimbursement. The drugmaker confirmed last year that the president of its China division had been detained.  

--With assistance from Lisa Pham.