AstraZeneca quarterly earnings shot below analysts’ targets but the pipeline of drugs looks promising.
Announcing earnings on Thursday morning, the UK drug manufacturer did not meet expectations but rather emphasized the positive pipeline and a major new acquisition.
Pascal Soriot, Chief Executive Officer, commented, “Our strong performance in Emerging Markets is a particular highlight, with China becoming our second largest national market, while the delay in the introduction of Nexium generics in the U.S. helped to direct additional investment towards our launch brands and our rapidly advancing pipeline.”
To aid expansion into the U.S. market, AstraZeneca has signed a deal to buy Actavis, the American respiratory drug business for an initial payment of $600 million. To push global sales the company is preparing to market Lesinurad gout treatment in Europe, and LYNPARZA for advanced ovarian cancer to the U.S and EU markets. Pascal Soriot reported, “a record six product approvals”, adding, “Alongside this, we delivered four quarters of revenue growth, with growth platforms now contributing over half of our revenues.”
However, future sales are expected to decrease due to expiries on the lucrative cholesterol drug Crestor and heartburn treatment Nexium. AstraZeneca is forecasting a decline in 2015 sales revenue by a mid single-digit percentage rate at constant exchange rates though core earnings per share are expected to increase by a low single-digit percent.
Fourth quarter sales at AstraZeneca fell by 2% to $6.68 billion, providing core earnings down 38% at 76 cents a share. Thomson Reuters had predicted $6.79 billion and earnings of 82 cents a share.
Share price over the full year was up by 15.61% in contrast to the UK100 [FTSE], which rose only 2.95% in total. Wednesday closing shares stood at 4682, falling by 2% at Thursday’s opening.
Since rejecting a takeover bid by Pfizer in 2014, AstraZeneca have been bullish in their acquisition and pipeline approach, whilst insisting that, “With the depth of our science and the momentum we have built across our organisation, we are on track to return to growth by 2017 and are well positioned to deliver our long-term goals.”
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