Astrazeneca to profit from Covid jab
Drugs giant Astrazeneca has revealed that revenues leapt 50 per cent in the latest quarter as it was buoyed by more than $1 billion (£780 million) worth of Covid-19 vaccine sales.
The pharmaceutical group held firm on its earnings guidance for the year as it hailed “strong revenue growth and exceptional pipeline delivery”. It saw total revenues jump to $9.87bn for the quarter, with revenues for the year to date up by 32 per cent.
The latest numbers come after the firm, which said it will nottakeaprofitfromitscoronavirusshotduringthepandemic, unveiled plans to set up a separate arm for vaccines and antibody treatments which focus on Covid-19.
The company added that limited profit from the vaccine in thenextquarterwilloffsetcosts related to its antibody cocktail developed to prevent and treat Covid-19.
Astrazeneca reported that product sales have risen by a third, with the trend set to continueasitannouncedeightpositive phase three trials, including treatments for liver and prostate cancer.
Chief executive Pascal Soriot said: “Astrazeneca’s scientific leadership continues to providestrongrevenuegrowthand exceptional pipeline delivery, with eight positive late-stage
readouts across seven medicines since June, including our long-actingantibodycombination showing promise in both prevention and treatment of Covid-19.
“The addition of Alexion furthersourcommitmenttobring transformative therapies to patients around the world, and I am proud of our colleagues’ ongoing dedication and focus.”
He added: “Our broad portfolio of medicines and diversified geographic exposure provides a robust platform for
long-term sustainable growth. Following accelerated investment in upcoming launches after positive data flow, we expect a solid finish to the year and our earnings guidance is unchanged.”
Nicholas Hyett, equity analyst at financial services group Hargreaves Lansdown, said: “The acquisition of Alexion means Astra’s sales numbers have soared. But impairments, additional operating costs post acquisition, new drug launches and the fact the group still
makes no profit on vaccine sales all mean profit margins are down substantially.
“Some of those are in line to be sorted in short order. The group plans to build a modest profit into new vaccine orders goingforwardsandwe’dexpect someefficienciesfromthealexion merger – especially in areas like sales and administration.
“The up-front spend on new drug launches should also pay dividends starting from next quarter.”
Adam Vettese, analyst at
multi-asset investment platform etoro, noted: “Covid vaccine maker Astrazeneca has reported a reasonably robust set of numbers, but won’t set shareholders alight as it looks to move forward from the pandemic.
“The challenge for AZ now is where next. It has produced a successful (if at times controversial) vaccine and its forward earnings guidance has remained unchanged.”