• Loading stock data...
 AstraZeneca vaccine turns profitable, drugmaker banking on new orders

A company logo is seen at the AstraZeneca site in Macclesfield, Britain, May 11, 2021. REUTERS/Phil Noble

AstraZeneca vaccine turns profitable, drugmaker banking on new orders

Nov 12 (Reuters) – AstraZeneca (AZN.L) is counting on new orders to move its COVID-19 vaccine to “modest profitability” after the shot made a small contribution to earnings in the third quarter and achieved $1.05 billion in sales for the three-month period on Friday.

The Anglo-Swedish drugmaker, which vowed not to make a profit from the vaccine during the pandemic, this week unveiled plans to set up a separate unit to focus on its coronavirus efforts. Its vaccine will remain not-for-profit for low-income nations as it moves to earning modest profits from new orders from richer countries. read more

Shares of the FTSE 100 (.FTSE) drugmaker fell nearly 6% in early trading before paring some losses to trade 2.4% lower at about 92.26 pounds at 0858 GMT as overall third-quarter profit fell short of analysts’ expectations.

Core earnings for the three months to September came in at $1.08 per share, the company said, with its vaccine, Vaxzevria, contributing one cent to the profit. Total product sales jumped 47% to $9.74 billion on a constant-currency basis.

Strong performance of core treatments like kidney disease treatment Farxiga and established asthma drug Symbicort, helped revenue, with the addition of rare-disease specialist Alexion from July 21, thanks to last year’s $39 billion deal, also boosting sales.

However, integration costs related to the Alexion deal ate into profits, as did a $1.2 billion writedown for an experimental kidney disease treatment it acquired in 2012, with overall expenses also rising on investments into its drug pipeline.

Top selling drug Tagrisso for lung cancer also posted lower-than-expected growth in sales due to price cuts in China.

AstraZeneca said a profit boost from the vaccine in the fourth quarter would make up for costs related to its antibody cocktail for preventing and treating COVID-19, as it stuck with its overall profit forecast for the year.

AstraZeneca’s shot has had a tumultuous journey, with its not-for-profit strategy and challenges around efficacy data, supplies and links to rare blood clots, fuelling speculation on whether it would want to keep the business in the long term.

The drugmaker and its Indian manufacturing partner, Serum Institute, have supplied more than 1.5 billion vaccine doses as of the end of September.

Rival Pfizer (PFE.N) this month forecast 2021 and 2022 sales from its COVID-19 vaccine of at least $65 billion overall, topping estimates. However, Moderna (MRNA.O) slashed its 2021 sales outlook for its shot by as much as $5 billion, on production hiccups.

Including sales from the vaccine in the fourth quarter, AstraZeneca now expects 2021 revenues to grow by a mid-to-high twenties percentage, compared with a previous forecast of a low-twenties percentage.

Liberum analyst Alistair Campbell said in a note the higher expenses would raise some concerns but the reiteration of guidance gives some reassurance.

Analysts on average were expecting third-quarter profit of $1.28 per share on sales of $9.4 billion, according to Refinitiv IBES data.Reporting by Pushkala Aripaka in Bengaluru and Ludwig Burger in Frankfurt Editing by Elaine Hardcastle

Our Standards: The Thomson Reuters Trust Principles.

This article was originally published by Reuters.

Global Business Magazine

Global Business Magazine

Related post

Leave a Reply

Your email address will not be published. Required fields are marked *