9th Feb 2023 11:06
(Alliance News) - AstraZeneca PLC reported a swing to full-year profit and saw a double-digit revenue rise on Thursday, despite a weaker fourth quarter.
The Cambridge, England-based pharmaceutical firm said total revenue in 2022 rose by 19% to USD44.35 billion from USD37.42 billion a year before, or by 24% at constant currency.
It noted that growth came from all therapy areas, as well as the addition of Alexion Pharmaceuticals, a US acquisition that was added to AstraZeneca's accounts starting in July 2021.
AstraZeneca swung to a pretax profit of USD2.50 billion from a loss of USD265 million, while core earnings per share jumped 26% to USD6.66.
Operating profit surged to USD31.96 billion from USD24.98 billion a year ago.
The pharmaceutical firm saw a weaker fourth quarter, however, as revenue fell by 7% to USD11.21 billion and core EPS fell by 17% to USD1.38.
The lower revenue in the quarter was partly due to the decline in Vaxzevria, Astra said. Revenue excluding Vaxzevria rose 17%.
Looking ahead, Astra expects revenue in 2023 to grow at low-to-mid single-digit percentages at constant currency, or by low double-digit percentages excluding Covid-19 medicines.
Core EPS is expected to see high single-digit to low double-digit growth.
Hargreaves Lansdown's Susannah Streeter said it was "no surprise" that AstraZeneca's 2023 guidance was "more muted" amid a big drop in Covid-19 vaccine sales, which she said was part of a "larger Covid cliff" that is currently impacting the pharmaceutical industry.
"However," Streeter continued, "[AstraZeneca's] pipeline is strong and stretches well beyond Covid. This is giving CEO Pascal Soriot confidence that AstraZeneca is on a path to deliver at least fifteen new medicines before the end of the decade."
Chief Executive Officer Pascal Soriot noted on Thursday that the firm has made "excellent" pipeline progress, with a record 34 approvals in major markets.
He added that the firm is initiating new late-stage trials for "high potential medicines" such as camizestrant, datopotamab deruxtecan and volrustomig, which are indicated as treatments for various cancers.
"Our research and development success and revenue increase in 2022 demonstrate that we are on track to deliver industry-leading revenue growth through 2025 and beyond, and have set AstraZeneca on a path to deliver at least fifteen new medicines before the end of the decade," he continued.
Shore Capital said AstraZeneca boasts an "industry-leading research & development pipeline" with a breadth of "next-generation innovative assets."
"We see plenty of scope for the pipeline to surpass expectations and our forecast reflect long-term, margin-enhancing revenue growth," it said.
Shore pointed to data readouts across the breadth of AstraZeneca's pipeline, particularly in 2023, which drive "further multiple expansion or upgrades." These included upcoming phase three readouts from TROPION-Lung-02 for datopotamab deruxtecan and DESTINY-Breast06 for Enhertu.
The TROPION-Lung-02 trail is evaluating the safety and efficacy of datopotamab deruxtecan at two dose levels in the treatment of lung cancer. The DESTINY-Breast06 is evaluating the efficacy, safety and tolerability of Enhertu in the treatment of breast cancer.
The readouts are expected in the first half of 2023, and the second half of the year, respectively, according to Shore.
Shares in AstraZeneca were up 4.6% at 11,244.00 pence on Thursday morning in London. Over the past 12-months, the stock is up 24%.
Shore Capital said AstraZeneca shares trade on a financial 2024 price-earnings ratio of around 14.5x, "broadly in line with the US and European peer group average."
It added that its fair value of 12,700 pence per share for AstraZeneca, meanwhile, implies a 17x price-earnings ratio. The capital markets firm said this was a premium it believes can be justified given "the impressive earnings trajectory" and its conviction that AstraZeneca has the "pipeline to sustain longer-term growth".
By Heather Rydings, Alliance News senior economics reporter
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