AstraZeneca's first-quarter sales, profit decline, hit by generic competition to Crestor

AstraZeneca announced Friday that first-quarter revenue fell 4 percent year-over-year to $5.2 billion, broadly in line with analyst expectations, as sales of Crestor were hit by generic competition in Europe and Japan. Product sales in the quarter increased 3 percent to just under $5 billion, while profit slipped 38 percent to $316 million.

CEO Pascal Soriot said "the performance was in line with our expectations and guidance for the year is unchanged." The executive noted "our China sales continued to surpass expectations and we expect that the effects of the Crestor patent expiries in Europe and Japan will recede materially in the second half." In the quarter, sales of Crestor plunged 38 percent to $389 million, missing analyst estimates of $452 million.

Soriot added "we delivered strong results for Lynparza, Tagrisso and Imfinzi…Brilinta and Farxiga…and a successful launch of Fasenra." AstraZeneca reported Imfinzi sales of $62 million in the three-month period, boosted by the recent US approval for the treatment of unresectable, Stage III non-small-cell lung cancer (NSCLC), while Fasenra experienced "a very strong launch and uptake, especially in the US and Germany," with revenue reaching $21 million.

The company added that quarterly sales of Tagrisso jumped 98 percent year-over-year to $338 million, mainly due to growth for the treatment of second-line EGFR T790M-mutated NSCLC, with revenue from Lynparza more than doubling to $119 million. Meanwhile, sales of Farxiga climbed 44 percent to $299 million, with revenue from Brilinta growing 31 percent to $293 million, which AstraZeneca explained was a result of "continued market penetration" in acute coronary syndrome and high-risk periprocedural myocardial infarction.

In the quarter, sales in China lifted 31 percent to $1 billion, with the drugmaker noting that revenue in the country crossed this threshold for the first time, led by the launch of Tagrisso. AstraZeneca added that externalisation revenue in the three-month period fell 66 percent to $193 million.

Looking ahead, Soriot said "the headwinds that we are experiencing from patent expiries will be very much behind us by the end of this year." However, some investors have expressed concerns at the chief executive's bonuses, with proxy advisory firm Institutional Shareholder Services recently calling for shareholders to vote against the company's pay plans. At AstraZeneca's annual meeting on Friday, the non-binding pay report was supported by 65 percent of shareholders, but rejected by 35 percent. In a post-results conference held prior to the vote, Soriot had said "we are in ongoing discussions with the shareholders to address their concerns."

Commenting on the first-quarter results, Barclays analysts said "despite the headline miss we actually regard this as a positive set of numbers." Meanwhile, Deutsche Bank analyst Richard Parkes noted that sales of Imfinzi and Fasenra had beaten expectations by 39 percent and 103 percent respectively.

To read more Top Story articles, click here.