AstraZeneca raised its earnings forecasts for 2006 this morning after reporting a 36% increase in operating profits to $1.98 billion, helped by cost-cutting, as sales advanced 8%, driven by schizophrenia drug Seroquel and cholesterol-lowerer Crestor.
The figures - combined with a just-announced licensing deal for a potential blockbuster drug for breast cancer - drove up AstraZeneca’s shares by a little over 1% to £30.25 on the London Stock Exchange.
Sales came in at $6.18 billion, although AstraZeneca’s top-selling drug, Nexium (esomeprazole) for gastrointestinal disease, did not grow as much as hoped, rising 13% to $1.19 billion. Second-rank product Seroquel came to the fore with a 27% increase in turnover to $807 million, while Crestor (rosuvastatin) surged 42% to $387 million.
Jon Symonds, AstraZeneca’s chief financial officer, said the firm would consider engaging in some competitive pricing to drive sales of Nexium.
Other good performers were breast cancer drug Arimidex (anastrozole), rising 39% to $335 million, and combination asthma drug Symbicort (budesonide and formoterol) which was up 21% to $277 million and could provide a major upside for AstraZeneca if it secures US approval for the product. It filed a dossier for Symbicort with the US Food and Drug Administration last September.
2006 EPS forecasts raised
The Anglo-Swedish firm said it was raising its earnings per share (EPS) targets in 2006 to $3.60-$3.90, up from $3.40-$3.60, but stressed this prediction assumes that its blood pressure drug Toprol XL (metoprolol) will not see generic competition in the USA this year.
AstraZeneca lost a crucial patent infringement lawsuit in the USA in January that raised prospects of generic competition to the product, although it has appealed the ruling. The EPS forecasts include about 33 cents of earnings related to Toprol XL, said the company. Meanwhile, it is also facing patent challenges to Nexium and Seroquel.
Also today, AstraZeneca said it had acquired US co-promotion rights to Abraxane (paclitaxel protein-bound particles for injectable suspension) from Abraxis BioScience in a deal valued at $200 million. Although the UK-headquartered firm declined to give sales projections for the product, it said it expected Abraxane to become a ‘substantial product’ in breast cancer.
It will compete with taxanes drugs, including paclitaxel, which are already widely-used in cancer treatment and represent a multibillion dollar market. Abraxane is an albumin-bound formulation of paclitaxel that has been shown to have a higher response rate in breast cancer than the parent drug, removes the need for pre-medication to prevent hypersensitivity reactions and can be given with a short infusion time.
As part of the deal, AstraZeneca has also agreed to sell its range of US branded anaesthetics and analgesic products for $350 million.
The company has taken great pains to bolster its pipeline in recent months, with recent transactions including the purchase of cancer specialist KuDOS in January for $210 million, the licensing of a drug for atherosclerosis from AtheroGenics in a deal valued at up to $1 billion, and securing rights to a sepsis drug from Protherics for $285 million.