AstraZeneca Profit Drops on Decline in Blockbuster-Drug Revenue -- Update
April 27 2017 - 4:24AM
Dow Jones News
(Updates with background and detail throughout.)
By Denise Roland
AstraZeneca PLC (AZN), battling declining sales of its
blockbuster cholesterol pill, posted lower revenue and profit in
the first quarter of the year.
Cambridge, England-based AstraZeneca is furiously working to
launch a string of new drugs to help return the company to growth
as a series of patent expirations erodes sales for its stalwart
drugs, such as cholesterol-lowering pill Crestor.
Sales from AstraZeneca's "growth platforms"--a collection of new
drugs and faster-growing geographic regions--increased 4% to $3.57
billion from a year earlier.
But that was eclipsed by a sharp decline in sales of Crestor,
which started facing competition from low-cost competitors last
year. Crestor sales fell 45% to $631 million.
Overall, revenue fell 12% to $5.41 billion, and net profit slid
17% to $537 million.
Still, AstraZeneca posted better-than-expected core operating
profit, a measure that strips out one time gains and impairments,
due in large part to a rise in one-off proceeds from deals struck
to offload drugs that fall outside its key therapy areas.
Core operating profit rose 5% to $1.67 billion, though stripping
out the effect of the strong dollar, it fell 2%. Analysts expected
core operating profit of $1.4 billion.
Chief Executive Pascal Soriot has long indicated that 2017 would
mark the final of several years of flat or falling sales at
AstraZeneca, which now faces no more major patent expirations until
the early 2020s. The company expects revenue to decline by a
low-to-mid single digit percentage this year.
He has vowed that AstraZeneca's recently-launched drugs, and
several more in late-stage testing, will nearly double yearly
revenue--which was $23 billion in 2016--to $45 billion by 2023.
That promise formed a key part of his defense against an ultimately
failed takeover bid by Pfizer Inc.
The company this year awaits some key clinical trial results,
including those for a combination of two cancer immunotherapy drugs
that it hopes will prove more effective at fighting lung cancer
than competing single-drug approaches. If successful, AstraZeneca
would be entering an already-competitive field that includes drugs
from Bristol-Myers Squibb Co., Merck & Co. and Roche Holding
AG.
Write to Denise Roland at denise.roland@wsj.com
(END) Dow Jones Newswires
April 27, 2017 04:09 ET (08:09 GMT)
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