Astra’s healthy prospects
Among the little-trumpeted reasons why Britain should grow and prosper after we leave the European Union is that the UK is a leader in biotechnology, pharmacology and natural science research.
The hub of oxford, Cambridge, Imperial and UCL universities – with the Crick Institute added on – has no match outside of the Boston area in the US.
It is of marginal importance that the European medicines Agency is moving to the netherlands, as long as Britain seizes the initiative and creates a UK regulator open to fast-track testing and approvals.
When AstraZeneca stood firm in the face of an assault from Pfizer in 2014, the defence, led by French chief executive Pascal Soriot, was based around the future value of AZ’s drugs pipeline and the promise to establish a £700m research centre in Cambridge. Both are now happening.
AZ cancer treatments, largely based around immunology treatments Imfinzi and Tagrisso for lung cancer and Lynparza for ovarian cancer, are now on the market. Indeed, Astra is working on a blood test that can identify tumour cells, which it hopes will lead to patients being scanned much earlier. The faster the diagnosis, the better chance of survival, with the possibility of a 95pc cure rate.
The group’s new medicine for life-threatening asthma, Fasenra, is also exceeding expectations. Sales in the third quarter are up 9pc. AZ also looks to be cracking the China market, where sales are up 32pc. There, the group has embraced smart technology to drive sales.
The bottom line doesn’t look as healthy, reflecting the huge continuing cost of R&D and drug development. But by the end of the year, AZ is pledging a rise in earnings per share. Like many businesses, it is committing funds to Brexit contingencies, including setting up supplementary production in Sweden for its blockbuster treatment Lynparza, currently made in macclesfield.
But, unlike former BT boss Sir mike Rake and the car makers, it is not screaming foul from the sidelines.
Good-time Charlie
IT WAS just 18 months ago that Sir Charles mayfield was garlanded with the Chartered management Institute’s gold medal award, regarded as one of the highest honours in business. And it was only in September that the 51-year-old chairman of John Lewis was describing himself as energetic and noted the longevity of past holders of the job.
But while many eyes were diverted by the ousting of our old friend Jeff Fairburn of Persimmon, clutching his £75m cheque, John Lewis let it be known that mayfield would be heading for the door in a relaxed fashion in 2020.
While it is still fashionable to laud the John Lewis stakeholder model, where the good and bad times are shared among partners, the most recent results, showing profits had plunged 99pc in the first half to £1.2m, are almost enough to make marks & Spencer look like a Rolls-Royce operation.
In a world of online price transparency, Lewis’s ‘never knowingly unsold’ creed is looking a little threadbare.
Anecdotal evidence is that some of its newer Waitrose outlets are struggling and fresh produce in established outlets is not what it was. Arguably, the problems of other department store chains House of Fraser and Debenhams should provide an opportunity for John Lewis, as the last full-service department store standing, to reassert itself. mayfield has more than a year to make mid-course corrections.
But there may be partners wondering whether it was wise to have allowed the ‘tubby grocer’ mark Price, a potential successor, to head off into the sunset in 2016.
Argos back-stop
IS SAINSBURY’S chief executive mike Coupe getting windy about the £14bn merger with Asda?
Certainly, he sounds confident that, if Asda floundered, the purchase of Argos and its logistics has given it an online edge.
Some 60 new Argos outlets have been added to its supermarkets, and synergies of £63m delivered early. Turnover and earnings are heading in the right direction.
The risk is that, after a 32pc rise in Sainsbury’s shares this year, the Competition and markets Authority will block or demand remedies which could mess with the economics of greater purchasing power.
That could bring the stock down with a nasty bump.