6th Nov 2014 07:36
LONDON (Alliance News) - AstraZeneca PLC Thursday raised its guidance for the full year 2014, as it saw revenue rise in the nine months to end-September at constant currency.
The pharmaceutical company said its growth drivers offset the hit from generic competition, although exceptional costs hit its pretax profit.
The company also announced that it has agreed to sell its Myalept orphan product for the treatment of leptin deficiency in patients with generalised lipodystrophy to Aegerion Pharmaceuticals Inc for USD325 million upfront. It expects to complete this transaction in January 2015.
The company now expects revenue to rise in the low single digits at constant currency in 2014, and for core earnings per share to decrease at around 10% at constant currency for the full year. At actual exchange rates core earnings per share is expects to be hit by currency by around 5%. At the time of its interim results the company guided revenue in line with 2013 and core earnings per share to decline in the low double digits, both at constant currency.
AstraZeneca posted a pretax profit of USD1.83 billion in the first nine months of 2014, down from USD3.98 billion in the same period a year before, despite seeing revenue rise to USD19.41 billion from USD18.87 billion, due to exceptional costs including USD1.17 billion in restructuring costs, USD1.30 billion in amortisation and impairments, and USD691 million relating to its acquisition of Bristol-Myers Squibb Co's share in their diabetes joint venture.
The company said that additional final regulations from the US tax authority the Internal Revenue Service on the US Branded Prescription Drug fee meant that an additional year's charge had to be recognised in the third quarter.
Revenue was buoyed by a lower hit from the loss of exclusivity being offset by the company's growth drivers. Excluding additional revenue from the diabetes joint venture, revenue in the first nine months was stable at constant currency, AstraZeneca said.
Selling, general and administrative expenses rose 14% due to higher spend dedicated on growth platforms.
In the third quarter US revenues rose 7% as declining sales of AstraZeneca's mature brands such as Crestor and Nexium, and the timing of shipments of Flumist were more than offset by revenue from the diabetes joint venture.
Revenue in Europe dropped 1%, hit by declines in Seroquel XR due to adverse patent rulings, and launches of generics hitting Seroquel IR, Atacand and Merrem. However, the inclusion of the diabetes joint venture, and continued growth from Brillique helped to offset this.
The company warned that new guidelines further restricting patients eligible for preventative therapy with Synagis are expected to lead to a "significant impact" on Synagis sales in its fourth quarter, and a further impact in 2015.
The company said that, as it had increased its revenue expectations, it is accelerating its investments in its growth platforms and in expanding its pipeline. For 2015 it plans to selectively invest in its growth platforms and "accelerating" pipeline, whilst managing overall costs.
It is targeting core earnings per share for 2015 at "no less" than the lower end of the range of the new guidance for 2014 earnings per share at actual exchange rates. It expects to give its guidance for 2015 with its full year results on February 5.
"This enhanced execution of our strategy and our sustained performance gives us confidence to increase our revenue and Core earnings guidance for the year. I'm particularly proud of our teams who continue to demonstrate their focus and belief in our strategy, which is rapidly transforming our company," said Chief Executive Pascal Soriot in a statement.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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