Astrazeneca sweetens the pill as profit forecasts help boss Pascal Soriot
British drugmaker Astrazeneca yesterday confounded City expectations by raising its sales and profit forecasts for this year, two months after fending off a near-£70bn takeover approach from bigger US rival Pfizer.
Astrazeneca, the country’s second-largest pharmaceutical firm, reported a second consecutive quarter of revenue growth, beating City forecasts with second-quarter revenues of $6.5bn (£3.8bn), up four per cent at constant exchange rates. This was driven partly by strong sales of its new heart drug Brilinta and the newly launched diabetes treatment Farxiga.
Core earnings per share were also better than expected, rising 13 per cent to $1.30. Pre-tax profits totalled $866m.
The company has also replenished its pipeline of new therapies, saying it has 14 new medicines in late-stage clinical trials, compared with eight at this stage last year.
It now expects full-year revenues to be similar to last year’s, compared with previous expectations of a low-to-mid single digit percentage decline.
This strong set of results will boost chief executive Pascal Soriot’s strategy. At the time of Pfizer’s bid, he pledged a 75 per cent increase in revenues to $45bn by 2023, seen by some analysts as overly ambitious.
Soriot will now be able to flag Astrazeneca’s progress as an independent company at an investor day scheduled for 18 November. This falls just a week before Pfizer can make another offer for the company following a six-month cooling-off period under UK takeover rules.
Analysts have speculated that Astrazeneca is now even less likely to invite Pfizer back to the negotiating table once it is allowed to do so, from late August.
Deutsche Bank analyst Mark Clark said the results represented a “big beat”, but were flattered by one-time items. He added that the improved outlook for the year was likely to be taken in its stride by the market.
Astrazeneca’s shares closed down 0.3 per cent at 4,344.50p.