AstraZeneca 3Q Earnings Up 22 %
Thu, 10/29/2009 - 4:34am
JANE WARDELL AP Business Writer LONDON (AP) — AstraZeneca PLC posted a 22 percent rise in third quarter net profit on Thursday, boosted by initial sales of its swine flu vaccine and delayed entry of generic drug competition in the United States. The expectation of further profits expected from its Novel Influenza A vaccine for the H1N1 led AstraZeneca to lift its full-year earnings forecast. AstraZeneca also said that it had reached an agreement in principle with the U.S. Attorney's Office in Philadelphia, setting aside $520 million to resolve an investigation into its sales and marketing practices regarding anti-psychotic drug Seroquel. The company posted net profit of $2.12 billion for three months to the end of September, up from $1.74 billion in the same period a year ago. Revenue rose 5.5 percent to $8.2 billion, supported by strong demand for its cholesterol drug Crestor alongside sales of the H1N1 vaccine and reduced generic competition. Chief Financial Officer Simon Lowth said the results, "boosted by some unanticipated revenue upside," led the company to lift its full year earnings per share forecast to a range of $6.20 to $6.40, from $5.70 to $6 previously. Sales of the H1N1 nasal spray vaccine totaled $152 million in the quarter and Lowth said that the company was on track to deliver the 40 million doses ordered by the U.S. government by early next year. The bulk of sales from the total contract worth $453 million would be recorded by AstraZeneca in the fourth quarter, he said. Lowth said that the company had additional capacity of 200 million doses, but does not have the nasal spray capacity to match that. It continued to hold regulatory discussions about using that capacity in another form — perhaps a dropper — if demand warranted, he said. The quarterly result was also boosted by delays to the introduction of cheap generic versions of its heart drug Toprol-XL and cancer treatment Casodex. Rivals to both those drugs have since hit the U.S. market. Toprol XL sales surged 110 percent to $1.15 billion, while sales of Casodex dropped 43 percent to $174 billion. Crestor sales were up 30 percent at $1.15 billion. Lowth said that AstraZeneca's progress is solid underneath the unexpected quarterly benefits, pointing to consistent growth in emerging markets, where revenue was up 15 percent over the quarter. However, concerns remain about the company's future pipeline of drugs, with investors spooked on Wednesday when AstraZeneca pulled its lung cancer drug Zactima from regulatory clearance lists in the United States and European Union following disappointing trial results. The company's shares were down 0.2 percent at 2,783 pence in afternoon trade after initially tracking higher following the earnings release. AstraZeneca had been seeking approval to use the drug in combination with chemotherapy for treating advanced non-small cell lung cancer. The company said the decision to withdraw these submissions was based on analysis that demonstrated no overall survival advantage. Regulators had also hinted that the results were insufficient for approval, it added. Among other key drugs, sales of its heartburn drug Nexium were down 1 percent at $1.24 million over the quarter. Its asthma treatment Symbicort booked a 22 percent rise in sales to $562 million. Onglyza, the diabetes drug AstraZeneca launched with Bristol-Myers Squibb Co., booked AstraZeneca revenue of $9 million in the quarter. Seroquel sales were up 12 percent at $1.23 billion over the quarter. The Philadelphia inquiry included allegations that it promoted the drug for non-indicated uses. AstraZeneca did not comment on whether it had admitted any liability as part of the deal to resolve the investigation.