AstraZeneca ups earnings outlook
PHARMA firm AstraZeneca has raised its earnings outlook for this year and promised to hand more cash back to shareholders, following the sale of its Astra Tech dental unit.
The country’s second-largest drugmaker, which has a major cancer research centre in Alderley Edge and manufacturing plant in Macclesfield, said sales in the second quarter rose 3% to $8.43bn and profits were stable at $3.22bn.
The group faces a tough outlook with dwindling sales of heartburn pill Nexium and challenges to cholesterol fighter Crestor, which is likely to be hit by the arrival of generic copies of Pfizer’s Lipitor later this year.
Despite this, chief executive David Brennan said he now expected 2011 core earnings per share to rise to between $7.05 to $7.35, up from $6.95-7.25 forecast previously.
AstraZeneca received a significant boost last week when US regulators approved its key new heart drug Brilinta, but investors remain concerned that the group lacks enough new drugs to make up for those losing patent expiry.
In addition to Nexium, which is already off-patent in key European markets, U.S. protection for schizophrenia medicine Seroquel will expire next year and the patent on Crestor runs out in 2016.
Over the next five years, analysts forecast a steady decline in overall sales at the group because of heavy losses to generics – a trend that contrasts with rival GlaxoSmithKline, where sales are set to increase.
Given its long-term growth profile, some analysts have speculated that AstraZeneca may seek a sizeable acquisition to help fill the sales gap. Brennan, however, has said his focus is on smaller deals and alliances.
