24th Oct 2019 08:27
(Alliance News) - AstraZeneca PLC on Thursday posted a dip in third-quarter profit as a result of research & development expenses, as well as administrative costs.
For the three months ended September, the FTSE 100-listed pharma firm's pretax profit was USD409 million, down 14% from USD477 million the year before.
This reduction was the result of a 32% rise in selling, general & administrative costs to USD3.20 billion from USD2.42 billion, on top of a 5.5% jump in research & development expense to USD1.35 billion from USD1.28 billion.
Total revenue rose 20%, reaching USD6.41 billion from USD5.34 billion. This was thanks both to a 16% rise in product sales to USD6.13 billion from USD5.27 billion and to a more than trebling of collaboration revenue to USD274 million from USD74 million.
The product sale increase in the three month period "was supported by favourable inventory and gross-to-net movements" but these are not set to continue into the fourth quarter of 2019. Nonetheless, Astra has upgraded its product sales guidance and is now expecting a low to mid-teens percentage rise, having previously expected a low double-digit percentage increase.
Astra also reiterated its guidance for core earnings per share of between USD3.50 and USD3.70 for 2019 as a whole. This includes Astra's expectation for a "significantly lower sum of collaboration revenue and core other operating income and expense versus the prior year". In 2018, Astra's core EPS was USD3.46 for the year. Astra's core EPS figure excludes amortisation of intangibles and restructuring charges and provisions.
For the full 2019 year, capital expenditure is to remain "broadly stable" with restructuring expenses set to fall year-on-year.
Year-to-date, total revenue rose 13% to USD17.72 billion from USD15.67 billion, taking pretax profit up 4.0% at USD1.31 billion from USD1.26 billion.
Chief Executive Officer Pascal Soriot said: "With AstraZeneca growing at pace, our sales guidance has been upgraded for the second consecutive quarter. Another strong performance from our new medicines accompanied impressive results in our key markets, most notably in China, the US and Japan. The performance reinforces our confidence in delivering sustainable earnings growth.
"We delivered further positive news for patients. Lynparza demonstrated its potential as a treatment for prostate cancer and as an expanded treatment for ovarian cancer. Tagrisso, Imfinzi and PT010 also had positive data, and we delivered breakthrough data in heart failure for Farxiga.
"We are continuing to ensure that we capture the benefits of our growth by balancing reinvesting in our business, delivering on our sustainability commitments, continuing to improve our operating leverage and cash generation."
Shares in Astra were up 2.6% at 7,101.00 pence in London on Thursday.
By Anna Farley; [email protected]
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