AstraZeneca upbeat about growth as product sales climb 8 percent in third quarter

Headline results for the third quarter:

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"When we set out our strategy a few years ago, not everybody believed we could transform AstraZeneca," remarked CEO Pascal Soriot, adding "today marks an important day for the future…with the performance in the quarter and year to date showing what we expect will be the start of a period of sustained growth for years to come." Soriot said "our new medicines are now firmly established as the drivers of growth, supporting our continued success in emerging markets."

Meanwhile, Mark Mallon, executive vice president of global product and portfolio strategy, said that momentum is set to continue "into the fourth quarter and beyond," adding that a period of "double-digit growth" will "make a dramatic impact" on profit. Mallon also noted that the adverse impact of falling Crestor sales in developed markets was nearly at an end, commenting "in the big markets, those headwinds are gone. We're in a period of robust growth."

Other results:

• Cardiovascular, renal and metabolic disease product sales: $1.7 billion, down 4 percent
  • Farxiga: $355 million, up 25 percent, driven by emerging markets, where revenue jumped 42 percent to $85 million
  • Brilinta: $336 million, up 18 percent, due to "continued market penetration" in acute coronary syndrome and high-risk post-myocardial infarction
  • Bydureon: $152 million, up 19 percent, reflecting an "encouraging" BCise device launch in the US
  • Crestor: $353 million, down 39 percent
• Oncology product sales: $1.6 billion, up 56 percent
  • Tagrisso: $506 million, versus $248 million in the prior-year period, coming in above forecasts, boosted by increased use in the treatment of second-line EGFR6 T790M-mutated non-small-cell lung cancer
  • Lynparza: $169 million, versus $81 million in the prior-year period, although slightly below predictions, with growth driven by expanded use in ovarian cancer and approval for use in breast cancer
  • Imfinzi: $187 million, topping estimates, reflecting ongoing launches for the treatment of unresectable, Stage III non-small-cell lung cancer
• Respiratory product sales: $1.1 billion, up 5 percent
  • Symbicort: $619 million, down 7 percent, as competitive class pressures in the US "continued unabated"
  • Pulmicort: $264 million, up 9 percent
  • Fasenra: $86 million, beating predictions

• Nexium: $422 million, down 10 percent

• Emerging market sales: $1.7 billion, up 12 percent, with revenue in China up 32 percent to $954 million
• Externalisation revenue: $74 million, down 95 percent, with the prior-year period boosted by the impact of a deal with Merck & Co.

What analysts said:

"The continued outperformance from the new product launches and core diabetes portfolio should be well received," noted Liberum analyst Graham Doyle.

Meanwhile, Nicholas Hyett of Hargreaves Lansdown said "on the face of it these numbers are far from pretty. But scratch the surface and Astra is far from sickly. Its new drugs are flying off pharmacy shelves." Hyett added the company "still needs to get debt back under control before it can start growing returns to shareholders, but CEO Pascal Soriot isn't wrong when he says today is an important day."

Looking ahead:

The company reaffirmed its prior guidance of a low single-digit percentage increase in product sales this year, with core earnings per share in the range of $3.30 to $3.50, at constant exchange rates.

Pipeline update:

AstraZeneca said that the experimental mTOR inhibitor vistusertib, previously known as AZD2014, is no longer being studied in a mid-stage trial for solid tumours, while an early-stage combination study with the BTK inhibitor Calquence (acalabrutinib) in haematalogical malignancies has also been ditched.

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