31st Oct 2013 11:52
LONDON (Alliance News) - AstraZeneca PLC Thursday said it continues to anticipate mid-to-high single-digit decline in revenue on a constant currency basis for the full year, as it posted lower revenue and pretax profit in the third quarter due to the losses of exclusivity for several brands.
AstraZeneca said that it expects to increase core operating costs for the full year, which it anticipates will be towards the upper end of its low-to-mid single-digit guidance range. It continues to expect core earnings per share to decline at a "significantly higher" rate than the decline in revenue expected in 2013, AstraZeneca said.
In the third quarter AstraZeneca posted revenue of USD6.25 billion, down 6% from USD6.68 billion in the previous year. Pretax profit was USD1.59 billion, down from USD2.03 billion. AstraZeneca lost exclusivity for several brands, which it said accounted for around USD350 million of the revenue decline in the quarter.
Earnings per share dropped to USD1.21 from USD1.68 in the previous year.
"As expected, our financial performance this year reflects the ongoing impact from the loss of exclusivity for several key brands," said Chief Executive Officer Pascal Soriot in a statement. "I am pleased with the progress we are making, particularly on the pipeline, with three regulatory filings, three Phase III starts and four business development transactions since our last update."
US revenues dropped 8% in the third quarter, AstraZeneca said, partially due to loss of exclusivity but also the negative impact of the US healthcare reform dubbed Obamacare.
Cholesterol medication Crestor saw sales decline 11% to USD1.36 billion. Crestor sales dropped 14% in the US, impacted by inventory destocking and slightly lower realised prices, AstraZeneca said. In the rest of the world, Crestor declined 7% due to losses of exclusivity in Canada and Australia.
In Europe, revenues were down 4%, with declines related to the loss of exclusivity partially offset by revenue increases for anti-platelet medication Brilique and AstraZeneca's diabetes franchise.
In the established rest of the world, revenues were down 8%, with 5% growth in Japan offset by 32% declines in Canada. Generic competition for acid reflux medication Nexium hampered revenues in Canada. Crestor, Nexium and asthma treatment Symbicort performed well in Japan, but AstraZeneca warned that sales growth rates in Japan are volatile as many key products are affected by the timing of shipments to marketing partners. It expects sales in Japan to decline in the fourth quarter based on the phasing of shipments.
In China revenues were up 13%, although they were hurt by some inventory de-stocking. AstraZeneca cautioned that sales in 2012 had been hurt by supply-chain issues in emerging markets. It expects high single-digit revenue increases in emerging markets for the full year.
In a conference call Thursday morning, Soriot said the anti-corruption drive in China, which has particularly hit rival GlaxoSmithKline PLC, had not caused it to make any changes to its business. "The entire industry was effect by recent investigations," Soriot said, but added that AstraZeneca had always been careful. "We haven't done anything differently," Soriot said.
Soriot did note some slowing in demand, but said that growth rates remained strong in China.
An AstraZeneca employee was detained in China in July amid the ongoing investigations into GlaxoSmithKline, and Soriot said that the employee has since been released with no charges. He said there was nothing new to report on that situation.
In a separate statement, AstraZeneca said it had appointed Marc Dunoyer as Chief Financial Officer, succeeding Simon Lowth. Dunoyer previously worked at GlaxoSmithKline PLC and is currently AstraZeneca's executive vice president of global portfolio and product strategy. It said Lowth will leave Thursday.
Shares in the biopharmaceutical company were trading down 1.6% at 3,277.00 pence Thursday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
Copyright 2013 Alliance News Limited. All Rights Reserved.
Related Shares:
Astrazeneca