Analysts may have been unimpressed by AstraZeneca’s move yesterday to buy MedImmune for $15.6 million, but the Anglo-Swedish drugmaker’s healthy set of financials for the first quarter brought some admiring glances for the strong performance of its five key products.
Operating profit climbed 10% to $2.17 billion, while sales were up 13% to $6.97 billion. The cholesterol-lowerer Crestor (rosuvastatin) put in another stellar performance rising 59% to $628 million, while gastrointestinal drug Nexium (esomeprazole) was up 8% to $1.31 billion, affected slightly by significant price erosion and lower underlying demand in Germany. Seroquel (quetiapine) for schizophrenia advanced 13% to $923 million, breast cancer drug Arimidex (anastrozole) rose 15% to $401 million, and the firm’s combination product for asthma - Symbicort (budesonide and formoterol) - came in at $354 million, up 19%. The latter is scheduled to be launched in the USA around the middle of the year.
Blood pressure drug Toprol XL (metoprolol), sold as Seloken in some markets, slipped 4% to $444 million and wasdown 7% to $331 million, a good result given that the product is now facing generic competition there. AstraZeneca has taken the defensive measure of cutting a deal with Par Pharmaceuticals to launch an 'authorised' generic version of the product, but is still likely to see a significant decline in Toprol XL sales in the USA to the extent that they will be excluded from future earnings estimates.
Chief executive David Brennan said the firm continues to deliver “on our three strategic priorities”, as the first quarter showed that the company is on track to achieve full-year financial targets, the pipeline has been strengthened, “our number one priority,” and the “entire organisation is rising to the productivity challenge.” He added that this constitutes “a good start to the year, building on sound foundations established over the last three years.”
More late-stage misery as AGI-1067 is dropped
Nevertheless, fears were voiced about AstraZeneca’s late-stage pipeline as the company confirmed that it is to end its agreement with the USA’s AtheroGenics following a full analysis of the heart disease treatment AGI-1067, which incurs an $83 million charge taken in the first quarter. The decision came as little surprise given the disappointing Phase III data on the drug the firms announced in March but it constitutes another late-stage failure for AstraZeneca, especially after the number of disappointments it suffered last year. 2006 saw the termination of an intravenous formulation of AZD7009 for the treatment of atrial fibrillation, while Galida (tesaglitazar) for diabetes and blood clot preventer Exanta (ximelegatran) also failed to make the grade. NXY-059 (formerly Cerovive), a candidate drug for stroke, also bombed in a Phase III trial.
At the end of a busy day, AstraZeneca’s shares were down 4.1%
to £28.32, though the decline was due to investors’ fears about the firm’s decision to boost its biologics presence with the MedImmune acquisition. The fact that the firm is paying much more than Merck KGaA paid to get hold of Serono recently has led many observers to question the wisdom of the deal, but AstraZeneca’s chief financial officer Jon Symonds said that bidding was extremely competitive in the battle to buy MedImmune. The deal, which will be financed in part by taking on debt, is due to close in June.
