Skip to NavigationSkip to content

AstraZeneca emerges unscathed from $2.6 billion patent loss

Published on 03/02/04 at 11:04am

Strong growth in a new generation of products has helped AstraZeneca earn a memorable victory in overcoming $2.6 billion worth of US sales lost to generic competitors in 2003.

Three of the company's big-earners Zestril, Losec and Nolvadex all lost over 70% of their US sales to new generic versions in the course of the year, but the effect was cancelled out by rapid growth in newer products such as Losec's successor Nexium which increased its sales by 67%.

Chief executive Sir Tom McKillop said that the transition from old to new was now complete, claming:  "In two years the shape of our portfolio has been completely altered, and in doing so we have increased sales by $2.6 billion.

Despite the smooth succession, the company suffered a 9% fall in profits as it invested heavily in its R&D projects and expensive new sales and marketing efforts, in particular that of cholesterol lowering drug Crestor.

The drug, launched in the US in the autumn is up against Pfizer's flagship product Lipitor, far and away the world's biggest selling drug with $9.23 billion sales in 2003.

AstraZeneca announced that Crestor has so far recorded sales of $129 million and a 4.6% share of the US market calling it  a good start in a competitive market, but the results were below expectations of some analysts and were enough to depress the company share price by 1%.

The drug has achieved contrasting penetration in three early launch markets - the Netherlands, where it controls 8.2% of the market; 6.9% in Canada and just 2.9% in the UK, which the company says reflected the fact that it is traditionally slow to adopt new products.

Mr McKillop revealed that a US direct to consumer campaign for Crestor is ready for launch in the next few months to build on its intense promotion of the drug to medical professionals.

More of the company's salesforce have now been allocated to detailing Crestor, with extra contract teams taken on to make up the shortfall. The company now says it has an equal share of voice in the market with Lipitor and is even leading in the most important 'targeted' doctors segment.

Despite the burden of expectation on Crestor, Mr McKillop was bullish about the company's future claiming that its financial performance over the next two or three years would rank mong the best in its global peer group

This performance will be led by Nexium, which has become AstraZeneca's biggest product just four years after launch, with full year sales of  $3.3 billion achieved with sustained marketing and new formulations helping to boost sales.

Investors had been concerned about the impact of the launch of an over the counter version of omeprazole in the US, but AstraZeneca said the consumer launch had only affected prescription sales of omeprazole and had had no negative impact on Nexium or any of the other drugs in its class.

Meanwhile the FDA is shortly expected to make a preliminary ruling on the company's next 'megabrand' candidate anti-blood clot treatment Exanta, which has already received EU approval. AstraZeneca said Exanta's launch would be nothing like Crestor, entering as it was at a totally different level of competiton (ie, much lower) and a different therapeutic setting.

Nevertheless, chief financial officer Jonathan Symonds stressed that AstraZeneca did not have a policy of limiting marketing spend from quarter to quarter, saying: "We will keep flexible on Exanta - we will make sure that we get the right resources in at the right time."

The company said the drug would require a lot of medical education in order to make doctors move away from their long-established use of warfarin to Exanta, which it claims has a much better risk/benefit profile.

Pressure on prices around the world could be one possible threat to margins at AstraZeneca (as at other companies), with the management confirming that it would join the new Medicare discount card scheme, giving senior citizens reductions of up to 20% on major products.

Analysts Deutsche Bank say that even by its own conservative estimates, it expects AstraZeneca to achieve 17% sales growth in 2004 thanks to strong performance of Nexium, Seroquel and its newer oncology drugs.  

It also expects AstraZeneca to raise its already promising earnings per share forecast of $2.00 to $2.15 during the year.





Mission Statement is a leading portal for the pharmaceutical industry, providing industry professionals with pharma news, pharma events, pharma service company listings and pharma jobs,
Site content is produced by our editorial team exclusively for and our industry newspaper Pharmafocus. Service company profiles and listings are taken from our pharmaceutical industry directory, Pharmafile, and presented in a unique Find and Compare format to ensure the most relevant matches