Sales dip challenge atastrazeneca
ASTRAZENECA’S sales slumped by a bigger-thanexpected19% to $6.68 billion (£4.14bn) in the thirdquarter, underlining the challenges faced by newchief executive, Pascal Soriot.
Faced with patent expiries on once best-selling medicines and a thin pipeline of new drugs, analysts believe the former Roche executive, who joined on October 1, needs to re-focus operations and step up the hunt for acquisitions.
Mr Soriot said buying in products would be a key way of rebuilding the pipeline, adding there was also scope for the recently launched heart drug Brilinta to do “far better”.
“Oneof the critical things we need to do in the midterm is to bolster our pipeline and that will rely on business development activities; there is no question about it,” he said.
On his first day in office, Mr Soriot suspended share buybacks, giving him increased flexibility as the group undergoes a strategy review. He said investors would be updated on strategy at the end of January.
MrSoriot said innovation would remain core to operations and his prioritywas to “restore the company to growth and scientific leadership” at a timewhensome rivals are embracing increased diversification.
AstraZeneca, by contrast, was unlikely to get into generics or non-drug businesses such as consumer healthcare, he said.
In the search for promising new drugs, bankers believe AstraZeneca may look at potential acquisitions ranging from small and mid-sized biotech firms to pharmaceutical companies including Forest Laboratories and Shire.
Mr Soriot said all options were on the table when it came to deal-making but he was committed to a stable or improving dividend. The stock’s 6% dividend yield is a key attraction for many investors.
Aswell as generic competition, the strength of the dollarwas a drag on results, although this was offset by lower spending and a oneoff gain from Pfizer’s purchase of rights to an over-the-counter form of stomach acid drug Nexium. As a result, “core” earnings, which exclude certain items, were down by only 12% at $1.51 (99p) a share.