AstraZeneca’s earnings for the third quarter have been hit hard bygeneric competition to Toprol XL and charges but the Anglo-Swedishdrugmaker can take comfort from the fact that its five key productscontinue to perform well.
Operatingprofit fell 7% to $2.02 billion, better than analysts’ estimates, butwould have been flat were it not for $146 million of restructuringcosts and $212 million relating to the firm’s acquisition of MedImmune.Revenues were up 10% to $7.15 billion, though sales of itsbiggest-seller, the gastrointestinal drug Nexium (esomeprazole),actually slipped 1% to $1.29 billion.
Chief executive DavidBrennan said on a conference call that AstraZeneca continues to growits market share of the branded proton pump inhibitor market “but itisn’t enough at this stage to offset lower prices and the growth ofgeneric omeprazole,” ie copycat versions of the firm’s Prilosec/Losec.
However,the cholesterol-lowerer Crestor (rosuvastatin) put in another stellarperformance rising 25% to $691 million, and the drug’s launch in Japanin August has gone well. The firm had little to add about the genericchallenge to Crestor announced earlier in the day by Canada’s CobaltPharmaceuticals, saying that it is confident of demonstrating thevalidity of its patents and will defend them vigourously. Still, newsof the challenge seemed to panic investors and the firm’s shares fell1.8% to £23.30.
As for the other three key products, Seroquel(quetiapine) for schizophrenia advanced 22% to $1.06 million, the firsttime sales of the drug have passed the billion dollar mark in aquarter, while breast cancer drug Arimidex (anastrozole) rose 7% to$425 million. The firm’s combination product for asthma – Symbicort(budesonide and formoterol) – brought in $371 million, up 25%, boostedby its US launch at the end of June.
On the negative side, salesof the blood pressure drug Toprol XL (metoprolol), sold as Seloken insome markets, sank 33% to $328 million and were down 43% in the USA asgeneric competition hit hard. MedImmune’s paediatric vaccine forrespiratory syncytial virus Synagis (palivizumab) contributed $122million, up 9%, but AstraZeneca pointed out that the “highly seasonal”nature of the product means that majority of its sales will be recordedin the fourth and first quarters.
Mr Brennan said that “thebusiness is on track to meet its earnings target for the full year,” of$3.60 to $3.75 per share, excluding sales of Toprol XL andrestructuring costs, which will be some $900 million, or $0.44 pershare. He added that “the entire organisation is driving for increasedproductivity and the pipeline has been further strengthened during thequarter.” Ten compounds are currently in Phase III trials. By Kevin Grogan
