AstraZeneca's Q3 profit boosted by tax gain; drug sales down 14 percent

AstraZeneca said Thursday that third-quarter profit jumped 32 percent year-over-year to $1 billion, boosted by a one-off tax gain of $453 million, while revenue slipped 4 percent to $5.7 billion, missing analyst forecasts of $5.9 billion. The company noted that product sales in the three-month period dropped 14 percent to $5 billion, while externalisation revenue reached $674 million.

CEO Pascal Soriot remarked "the performance...was in line with our expectations, reflecting the transitional impact from the first full quarter of generic competition to Crestor in the US." Sales of the product, which lost patent protection in the US on July 8, plummeted 44 percent versus the year-ago period to $688 million.

According to AstraZeneca, sales from growth platforms reached $3.6 billion in the quarter, up 3 percent on a constant exchange rate basis, driven by revenue from Brilinta, which surged 22 percent to $208 million. However, for the company's other growth platforms, sales in emerging markets declined 2 percent to $1.4 billion, with revenue from respiratory products dropping 8 percent to $1.1 billion.

Meanwhile, sales of Symbicort dropped 18 percent to $697 million, with revenue from Nexium slumping 20 percent to $516 million. Further, overall sales of oncology drugs climbed 19 percent to $867 million, driven by the introduction of the lung cancer therapy Tagrisso, which posted revenue of $133 million, and the ovarian cancer treatment Lynparza, which reached $58 million.

For the full year, AstraZeneca confirmed its forecast of a low to mid single-digit percentage decline in both revenue and core earnings per share at constant exchange rates.

Soriot suggested that the election of Donald Trump as US President wouldn't alleviate pressure on drug prices in the country, adding that it is too early to predict how a repeal or substantial modification of the Affordable Care Act, or Obamacare, would affect the industry (for related analysis, read ViewPoints: Careful what you wish for – Trump policies not all rainbows and butterflies for drug industry). "The US marketplace has always been [one] that supports innovation and new differentiated medicines," Soriot remarked, adding "we hope it will remain the same."

AstraZeneca also disclosed Thursday that it will not seek approval of its PD-L1 inhibitor durvalumab in head and neck cancer based on Phase II study results. The company cited "recent changes in the...competitive landscape," including the FDA approval of Merck & Co.'s anti-PD-1 therapy Keytruda (pembrolizumab) in August for the treatment of patients with recurrent or metastatic head and neck squamous cell carcinoma with disease progression on or after platinum-containing chemotherapy.

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