18th May 2018 08:07
LONDON (Alliance News) - FTSE 100-listed pharmaceutical giant AstraZeneca PLC on Friday reported a substantial fall in profit for the first quarter of 2018, as revenue from externalisation dropped sharply.
Pretax profit for the three months to the end of March dropped by 36% to USD374.0 million from USD582.0 million for the same period the year before, due to a lower gross margin of 77.3% from 82.3%, higher selling, general and administrative costs, and a sharp fall in Externalisation revenue.
Externalisation revenue fell by 66% to USD193.0 million from USD562.0 million, leading to total revenue dropping by 4.0% to USD5.18 billion from USD5.40 billion the prior year, despite a 3.0% increase in Product Sales. Product sales rose 3.0% at actual exchange rates to USD4.98 billion from GBP4.84 billion, but the group added that product sales growth this year is weighted to the second half.
Despite the setback, AstraZeneca said it has left its guidance for 2018 unchanged, with Product Sales expected to see a low single digit percentage increase, and core earnings per share in the range of USD3.30 to USD3.50.
Outside of guidance however, selling, general and administrative expenses are set to rise, with externalisation revenue for the year expected to decline.
"Encouraging launches and strong performances from our newer generation of medicines made a significant contribution to Product Sales in the quarter, paving the way for our anticipated return to growth in 2018. The performance was in line with our expectations and guidance for the year is unchanged," said Chief Executive Officer Pascal Soriot.
"We delivered strong results for Lynparza, Tagrisso and Imfinzi in Oncology, Brilinta and Farxiga in CVRM and a successful launch of Fasenra in Respiratory. Our China sales continued to surpass expectations and we expect that the effects of the Crestor patent expiries in Europe and Japan will recede materially in the second half," Soriot added.
AstraZeneca shares were down 2.3% at 5,224.00 pence at the open Friday.
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