24th Apr 2015 07:41
LONDON (Alliance News) - FTSE-100 pharmaceuticals giant AstraZeneca PLC maintained its full-year guidance Friday, as the strong dollar hit its revenue in the first quarter of 2015, and it posted a decline in core earnings per share and operating profit due to continued investment in its pipeline.
Core figures exclude amortisation, impairment, restructuring charges and other exceptional items.
AstraZeneca posted a pretax profit of USD678 million in the quarter, up from USD638 million in the same period a year before, as a decline in revenue of 6% to USD6.06 billion from USD6.46 billion was offset by lower cost of sales and a boost from product disposals, including rare metabolic disease treatment Myalept for USD193 million and the US rights to beta-blocker Tenormin. Revenue growth was hit by the strength of the dollar. At constant currency revenue rose 1%.
However, at the core level, operating profit was down 4% to USD1.81 billion from USD1.95 billion, as a result of lower core operating margin, and higher investments and research and development costs, as AstraZeneca continued to invest in developing its late-stage pipeline and sales and marketing. The company had a lower cost base in the first quarter of 2014, but costs have increased since it bought up Bristol-Myers Squibb's share in their diabetes joint venture.
The company said it is committed to reducing its core selling, general and administrative investment costs compared to the year, and has a number of programmes in place to do so over the course of 2015.
Core earnings per share fell 7% at actual exchange rates to USD1.08.
In the US, product sales were down 14%, as growth from unstable angina treatment Brilinta, and type 2 diabetes treatments Farxiga and Bydureon was more than offset by the loss of exclusivity for acid reflux drug Nexium and competition from generics for its biggest seller, cholesterol and cardiovascular treatment Crestor. In Europe sales were down 5%, also hampered by generic competition to Crestor and to bipolar disorder treatment Seroquel XR.
This offset strong growth in emerging markets, particularly China, where its respiratory and diabetes portfolios performed well.
Revenue from Crestor fell to USD1.17 billion, reduced from USD1.33 billion a year before, and down from USD1.39 billion in the fourth quarter of 2014. Second biggest seller Symbicort, for the treatment of asthma and chronic obstructive pulmonary disease, fell to USD845 million from USD928 million a year before.
"Our encouraging performance in the quarter supports our full-year guidance," said Chief Executive Officer Pascal Soriot in a statement.
The company continues to expect its revenue for the year to decline by a mid single-digit percentage at constant currency, and core earnings per share to increase by a low single-digit percentage at constant currency.
At current exchange rates, AstraZeneca expects revenue to decline at a low double-digit percentage, and core earnings per share to be broadly in line with 2014.
Separately, AstraZeneca announced that it's MedImmune Ltd research and development arm has signed deals with US biotechnology company Celgene Corp and with French biopharmaceutical company Innate Pharma SA. It will work with Celgene to develop and commercialise an anti-PD-L1 inhibitor, MEDI4736, for hematologic malignancies, and with Innate to develop its anti-NKG2A antibody, IPH2201, including in combination with MEDI4736.
Medimmune will also work with Innate Pharma on developing Innate's anti-NKG2A antibody, IPH2201, including in combination with MEDI4736. Currently in Phase II development, IPH2201 is a potential first-in-class humanised IgG4 antibody. NKG2A is a checkpoint receptor that inhibits the anti-cancer functions of Natural Killer and cytotoxic T-cells.
Shares in AstraZeneca are trading down 1.2% at 4,772.00 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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