12th Nov 2021 08:51
(Alliance News) - AstraZeneca PLC on Friday said its expects a solid finish to 2021, amid double-digit revenue growth, as it continues to see strong demand for its Covid vaccine, but profit has been held back by rising costs.
"AstraZeneca's scientific leadership continues to provide strong revenue growth and exceptional pipeline delivery, with eight positive late-stage readouts across seven medicines since June, including our long-acting antibody combination showing promise in both prevention and treatment of Covid-19," said Chief Executive Pascal Soriot.
Shares in the blue-chip pharmaceutical firm were down 2.5% in London on Friday morning at 9,207.75 pence each.
The drug maker said it now expects to "progressively transition the vaccine to modest profitability as new orders are received". However, it said the profit contribution of this to the final quarter of 2021 will be offset by costs related to antibody combination AZD7442, so it left core earnings guidance unchanged for the full year.
AZD7442 is a drug cocktail shown to reduce severe Covid-19 or death in non-hospitalised patients with mild-to-moderate symptoms.
Astra reported total revenue in the year to date - including Alexion Pharmaceuticals - was USD25.41 billion, up 32% year-on-year. On a constant currency basis, revenue grew by 28% in the nine months to September 30. Total revenue in the third quarter alone increased by 50% to USD9.87 billion.
In 2021 so far, Oncology revenue increased 19% to USD9.74 billion, Cardiovascular, Renal & Metabolism was up 14% to USD6.03 billion, while Respiratory & Immunology was up 16% to USD4.46 billion. Covid-19 revenue was USD2.22 billion and Rare Diseases was USD1.31 billion.
Pretax profit in the nine-month period slumped to USD371 million from USD2.75 billion, as research & development costs surged to USD7.15 billion from USD4.27 billion and selling, general & administrative costs increased to USD10.12 billion to USD8.08 billion.
In the third quarter, Astra fell to a loss of USD2.00 billion from a USD853 million profit a year earlier. Research & development costs increased to USD3.61 billion from USD1.50 billion.
Astra noted that the Alexion integration is progressing well, creating new opportunities in rare diseases. Astra bought Alexion, a Boston, Massachusetts-based biotech firm, in July for USD13.3 billion in cash and 236.3 million new AstraZeneca shares. Revenue includes Alexion from July 21 onward.
Excluding Astra's Covid-19 vaccine, total revenue increase 21% or 17% at constant exchange rates, in the year to date, to USD23.19 billion, and by 34% in the third quarter to USD8.82 billion.
Soriot added: "Our broad portfolio of medicines and diversified geographic exposure provides a robust platform for long-term sustainable growth. Following accelerated investment in upcoming launches after positive data flow, we expect a solid finish to the year and our earnings guidance is unchanged."
For all of 2021, Astra said it expects total revenue excluding the Covid-19 vaccine to grow by a low-twenties percentage. Including vaccine revenue in the final quarter of 2021, revenue is expected to grow by a mid-to-high-twenties percentage.
In 2020, the drug manufacturer recorded revenue of USD25.89 billion.
Annual guidance for core earnings per share was kept at USD5.05 to USD5.40. Core EPS was USD1.08 in the third quarter and USD3.59 in the first nine months.
"Q3 2021 has seen a number of the big pharma cohort beat analyst estimates and raise Q3 guidance. This morning AstraZeneca did neither, missing analyst EPS estimates and maintaining guidance," commented Sebastian Skeet, senior analyst for healthcare sector clients at Third Bridge.
However, looking further ahead, Astra looks more impressive, he said:
"AstraZeneca finds itself with an enviable number of late stage pipeline candidates to fuel growth in the coming years. The crown jewel, its oncology franchise, goes from strength to strength with Enhertu continuing to impress our experts in breast cancer, with further potential upside in gastric and lung cancers, as well as Lyparza impressing with the recent top line data in prostate cancer. The rare diseases franchise has been buoyed by the Alexion contribution and the respiratory franchise has drivers in place with Breztri, tezepelumab and PT027."
By Paul McGowan; [email protected]
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