AstraZeneca First Quarter Revenue Hit by Patent Expiries; CEO Forecasts “Pivotal” Year for New Drugs

11:55 AM, Apr 27, 2017 — AstraZeneca (AZN), a British-Swedish drugmaker, whose chief executive is predicting a “pivotal year” in the development of new drugs, posted a revenue drop in the first quarter as it was hit by patent expiries on several key revenue-earners.

Total revenue declined 12% from the same quarter a year earlier to $5.41 billion, the company said on Thursday adding that the decline mainly reflected the impact of the expiry of a US patent on its Crestor cholesterol drug, meaning generic competitors are free to launch their versions of the medication. In constant currencies sales fell 10%.

Core earnings per share (EPS), which is adjusted for non-recurring items, rose 4% to $0.99 helped by cost control, the Cambridge, England-based company said. Core research and development costs declined by 6% to $1.34 billion and core general administrative and other costs dropped 14% to $1.83 billion.

The company, which has a strong focus on researching new cancer treatments, said it expects 2017 to be “a potentially defining year” in terms of news on its new products under development. It expects to reach major milestones for Faslodex, a breast cancer drug, Lynparza, a treatment for ovarian cancer and its durvalumab drug for bladder cancer in the second quarter.

“The total revenue performance reflected the transitional impact of recent patent expiries, which is expected to recede in the second half of the year,” Pascal Soriot, chief executive of AstraZeneca, said. “Importantly, we anticipate the significant progress of the pipeline to continue. The pipeline continued to deliver in what we expect will be a pivotal year for AstraZeneca as we announced important developments, in particular in oncology.”

Based on the first quarter, AstraZeneca confirmed its forecasts for the full year. It said it sees a low to mid single-digit percentage decline in total revenue and core EPS to drop by a “low to mid teens” percentage.

Companies: Astrazeneca PLC
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