AstraZeneca beats consensus forecasts with 3rd quarter 2009 profits up 22% raises forecasts

Anglo-Swedish drug major AstraZeneca beat consensus forecasts, posting third-quarter 2009 earnings a share of 41.68, versus projections of $1.38. Net profit rose 22% to $2.12 billion for three months to the end of September, boosted by initial sales of its swine flu vaccine - which reached $152 million - and delayed entry of generic drug competition in the USA. Revenue for the quarter rose 5.5 %to $8.2 billion.

Core operating profit in the third quarter increased 29% at constant exchange rates to $3.61 billion on revenue growth and operational efficiencies. The company's shares were down 0.2% at 2,783 pence in early afternoon trade, after initially tracking higher following the earnings release.

The gains have led the drugmaker to lift its full year earnings per share forecast to a range of $6.20 to $6.40, from $5.70 to $6 previously. Chief executive David Brennan said: "Our strong business performance is driven by good operating execution bolstered by revenue upsides from Toprol-XL and H1N1 vaccine sales. All these factors are reflected in our results for the first nine months and our increased core EPS target for the full year."

Product sales

Turnover of Toprol XL/Seloken (metoprolol) was up 110% to $414 million, and leapt 307% to $293 million (including sales of an authorized generic) in the USA, reflecting the withdrawal of copy products on that market. Also contributing strongly to the firm's performance, was cholesterol-lowerer Crestor (rosuvastatin), which increased 30% to $1.15 billion and, in the USA, and total prescriptions rose 25%, compared with 6% for the overall statin market.

Among AstraZeneca's other products, revenues for its blockbuster antiulcerant Nexium (esomeprazole) were down 1% to $1.24 billion, while the asthma drug Symbicort (budesonide and formoterol) increased 22% to $526 million. Sales of the antipsychotic Seroquel (quetiapine) rose 12% to $1.23 billion. Turnover of the breast cancer drug Arimidex (anastrozole) inched 2% higher to $476 million, while generic competition to Casodex (bicalutamide) saw the drug's revenues fall 43% to $174 million.

The company also noted that agreement in principle has been reached with the US Department of Justice to resolve its investigations related to Seroquel (quetiapine) sales and marketing practices. Accounts for $520 million of the $538 million provisions were taken in the first nine months, $108 million of which in third quarter.

Pipeline developments

Giving an update on its R&R pipeline, AstraZeneca notes that:

' its new diabetes treatment Onglyza (saxagliptin) has recently been approved in the USA and the European Union;
' Brilinta (ticagrelor) has been submitted for regulatory approval in the EU; and is on track for a US filing in the fourth quarter;
' new late stage development collaborations have been announced with Forest Laboratories and Nektar Therapeutics; and
' regulatory submissions for Zactima (vandetanib) have been withdrawn, based upon an updated analysis that demonstrated no overall survival advantage when added to chemotherapy.