AstraZeneca lifts revenue guidance on COVID treatment

·3-min read
FILE PHOTO: Exterior photos of the North America headquarters of AstraZeneca

By Natalie Grover and Ludwig Burger

(Reuters) -AstraZeneca said it expected prescriptions of its COVID therapy to drive sales growth of more than 20% this year, as company reported second-quarter profit that topped analyst estimates.

The injection, called Evusheld, which is designed to protect against COVID infection for at least six months, has been deployed in many countries for people with compromised immune systems who see little or no benefit from vaccines.

The long-acting antibody therapy, launched in December last year, generated sales of $445 million in the quarter.

"Real-world evidence has shown that 30% to 40% of COVID hospitalisations are in immunocompromised patients, so there is a real need for Evusheld right now," finance chief Aradhana Sarin told Reuters.

The London-listed company increased its full-year revenue guidance, saying it expects it to rise by a percentage in the "low twenties" rather than the "high teens" forecast previously.

It kept its forecast for a gain in adjusted earnings per share in the "mid-to-high twenties percentage" unchanged, partly because of a bigger budget for drug research and development and for the marketing and distribution of Evusheld.

The company also felt the impact of inflation with distribution costs like freight rates up by more that 30%, CFO Sarin said in a media briefing.

Analysts at brokerages Jefferies and JPMorgan said investors were unlikely to be impressed by the earnings outlook and its shares fell as much as 3.1% and were down 2% at 0930 GMT, underperforming the STOXX Europe 600 Health Care index that slipped 0.3%.

Second-quarter adjusted earnings almost doubled to $1.72 cents per share for the three months ended June 30, on revenue of about $10.8 billion, up 31%. Analysts on average expected profit of $1.56 cents per share on revenue of around $10.5 billion, Refinitiv data showed.

On Friday, the company also said Michel Demaré will take over from non-executive Chairman Leif Johansson when he retires next year. Demaré currently serves as the chair of AstraZeneca's remuneration committee.

Johansson became chairman in 2012, around the same time as Frenchman Pascal Soriot took charge as chief executive.

The move rules out Soriot, who fended off a takeover approach from Pfizer in 2014, as a chairman candidate.

As past chairman of Syngenta, Demaré in 2015 led the Swiss crop chemicals maker's successful defence against an unwanted takeover approach from U.S. rival Monsanto, which resulted in the agreed acquisition of Syngenta by ChemChina.

AstraZeneca said it expects increasing sales of Evusheld to offset a decline in sales of its COVID-19 vaccine Vaxzevria, developed with Oxford University, in the face of growing competition.

The company previously expected Evusheld growth would not make up for the decline in Vaxzevria sales.

Sales in key market China, which accounted for close to fifth of sales last year, slipped 6% to $1.44 billion on lower prices and as COVID lockdown measures kept some patients from seeking cancer care.

Astra's best-selling product Tagrisso against lung cancer had a quarterly increase in revenues of 7% to $1.4 billion, while sales of cardiovascular and diabetes treatment Farxiga jumped 51% to $1.1 billion in the quarter, both slightly ahead of market expectations.

(Reporting by Natalie Grover in London and Ludwig Burger in Frankfurt; editing by David Goodman, Jason Neely, David Evans, Barbara Lewis and Jane Merriman)