Cholesterol drugs drag AstraZeneca’s profits down in latest financial results
AstraZeneca has maintained its financial outlook for 2016, despite its Q2 and H1 results showing sharp falls in core earnings per share and core operating profits.
It was former blockbuster Crestor that took one of the biggest hits in terms of sales. While the drug generated $926 million in sales in the second quarter, this was 29% down on the same period last year. With several generics recently gaining FDA approval in the US, sales of Crestor are set to take a further hit going forward. For the full year to date, its sales of £2.08 billion are 16% down on 2015.
With falling sales in other older medicines such as Atacand and Casodex also observed, core earnings per share at AstraZeneca fell 31% to $0.83. and core operating profit falling 22% to $1.4 billion.
It is clear from these results that it is new, emerging drugs that the UK’s second largest drugmaker will have to turn around its fortunes. In this respect, there are already some encouraging signs.
Sales of new heart drug Brillinta rose 49% to $214 million, while diabetes drug Farxiga generated $211 million, representing a 64% increase. Similarly, promising new oncology drugs such as Tagrisso and Lynparza began to generate revenue in this quarter with hopes that they will lead the way forward in terms of revenue for AstraZeneca.
In terms of its emerging pipeline, and in the second half of 2016 alone, the company plans regulatory submissions for asthma drug benralizumab and for Tagrisso in lung cancer, while it also expects regulatory decisions for brodalumb in psoriasis and cediranib in ovarian cancer.
Pascal Soriot, AstraZeneca CEO, comments: “Our performance in the first half was in line with expectations, reflecting the anticipated near-term patent expiry challenges and the phasing of externalisation revenue in 2016. Our growth platforms continued to advance and made up over 60% of total revenue. Importantly, our transformed pipeline is advancing quickly and delivering a rich flow of differentiated medicines, boding well for our return to growth.”
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