Emerging markets bolster AstraZeneca’s earnings

DRUG maker AstraZeneca saw marginal increases in sales and earnings last year, with growth in emerging markets helping to offset the impact of government pricing pressure and generic competition.

The Anglo-Swedish company, which employs more than 4,000 people in the North West at a major research hub in Alderley Edge and manufacturing sites in Macclesfield, reported pre-tax profits of £6.8bn, up 1.5%, on sales of £20.8bn, also up 1.5%.

In the final quarter sales fell 4% to £5.4bn but earnings rose 6% to £1.4bn, beating market expecations. The business has also buoyed investors by planning to buy back shares worth £2.5bn.

Chief executive David Brennan said: “Our performance in 2010 underlines the strength and resilience of AstraZeneca’s business. Despite government pricing pressures and anticipated patent expiries in the US and Western Europe, our revenues remained in line with the previous year driven by excellent performance of our key brands and continued growth in emerging markets.

“This performance, combined with disciplined management of the business enabled us to deliver increased earnings, increase the dividend and return residual cash to shareholders through share repurchases.”

AstraZeneca saw US sales fall by 7% – with £1bn being lost to generic competition – while emerging markets grew 16% and accounted for more than half the revenue in its ‘rest of the world’ markets.

Last month the group said it would take a £286m hit after halting a major development programme for one of its newest drugs, Motavizumab which targets a respiratory virus in children.

The group’s full-year dividend rose 11% to £1.60.