AstraZeneca Q2 results exceed estimates; COVID vaccine sales decline.
AstraZeneca Q2 results exceed estimates; COVID vaccine sales decline.
AstraZeneca Reports Strong Q2 Profits, Boosted by Cancer Drugs
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AstraZeneca has delivered forecast-beating profits and sales in the second quarter, as the strong performance of its blockbuster cancer drugs helped offset the loss of COVID-19 vaccine sales. The Anglo-Swedish drugmaker’s shares rose as much as 4.8% before settling back to 3.9%, becoming the largest weighted gainer on the FTSE 100.
Chief Executive Pascal Soriot’s positive remarks on the company’s data from a key lung cancer trial have boosted sentiment around AstraZeneca. Speaking to the media after the second-quarter results, Soriot expressed his encouragement with the interim data from the TROPION-Lung01 trial. However, he did not explain why the company had not declared the results as “clinically meaningful.”
Despite a previous dip in share prices due to underwhelming interim data from the TROPION trial on an experimental precision drug called datopotamab deruxtecan, AstraZeneca intends to continue filing data from the trial with the U.S. drug regulator. This decision has helped ease some concerns among investors.
The strong Q2 results, which showed an adjusted profit of $2.15 per share, exceeding the expected $1.98 per share, add to a string of strong quarters for AstraZeneca. The company’s strong performance is attributed to its extensive lineup of cancer, metabolic, and rare disease drugs, as well as a solid pipeline of new drugs.
A Shift in Focus: Declining COVID-19 Vaccine Sales
AstraZeneca’s stellar Q2 results came despite the absence of COVID-19 vaccine sales. The company reported zero sales for its COVID-19 vaccine, which was its best-selling product in 2021 during the height of the pandemic. This decline in vaccine sales reflects the challenging competition faced by AstraZeneca in the market dominated by Pfizer and Moderna.
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However, AstraZeneca remains optimistic about its non-COVID therapy areas, with double-digit revenue growth witnessed in each segment. Eight medicines generated over $1 billion in revenue in the first half of the year, showcasing the strength of the company’s business beyond the pandemic.
Expanding Footprint in China
In addition to its global presence, AstraZeneca has a significant focus on the Chinese market. The company continues to show strong growth in China, with sales increasing by 7% in the second quarter, marking the fourth consecutive quarter of growth in the country.
As the largest drugmaker in China, AstraZeneca accounted for 13% of its total revenue in 2020. The company recently upgraded its guidance for China, expecting total revenue to grow by a low-to-mid single-digit percentage in 2023, up from a low single-digit percentage increase.
Addressing recent rumors of a plan to spin off its China business and list a separate unit in Hong Kong, AstraZeneca’s CEO dismissed them as mere speculation. The company expressed satisfaction with its current structure in China and emphasized its focus on delivering medicines to patients and collaborating with local biotech companies.
Alexion Acquisition Expands Genomic Medicine Capabilities
In a separate announcement, AstraZeneca’s subsidiary, Alexion, has agreed to acquire Pfizer’s early-stage rare disease gene therapy portfolio for up to $1 billion, along with royalties on sales. This strategic move aims to bolster AstraZeneca’s capabilities in genomic medicine, further enhancing its position in the market.
AstraZeneca remains committed to its 2023 outlook and continues to demonstrate its resilience in the face of challenges. With a strong pipeline of drugs, particularly in the areas of cancer, metabolic diseases, and rare diseases, the company is well-positioned for future success.
($1 = 0.7816 pounds)
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