AstraZeneca exceeded market expectations in its second-quarter earnings report. The British pharmaceutical firm has also upgraded its guidance for fiscal year 2024.
British pharmaceutical giant AstraZeneca reported earnings that beat market expectations in the second quarter, thanks to its robust growth in cancer drug sales and partner medicine revenue. The company has also upgraded its outlook for fiscal 2024.
The company reported earnings per share of $1.24 (€1.14) on total revenue of $12.94 billion (€11.94 billion), representing an increase of 15% and 17% from the same quarter last year at constant exchange rates (CER). The two key metrics topped Wall Street’s estimates of $0.99 and $12.65 billion, respectively.
Cancer drug sales lifted oncology medicine sales
Its sales surge extended the first-quarter momentum in the core segments, with sales in Oncology, cardiovascular, renal and metabolism (CVRM), and respiratory & immunology (R&I), all up 22%, and Rare Disease rising 15% from a year ago. Particularly, cancer drug sales saw a surge in all oncology medicines, with the collaboration revenue surging 49% on CER. Notably, revenue from Tagrisso was up 12% due to surging global demand, and Calquence rose 22%.
In addition, the pharmaceutical firm booked a strong first half, with the total revenue jumping 18% year on year to $25.62 billion (€23.63 billion). Core product sales gross margin remained at 82%, while core earnings per share increased 5% to $4.03 in the first half of 2024.
In the earnings statement, it noted that the increase in core earnings per share was lower than the total revenue growth due to gains recognised in the previous year, specifically a $241 million (€222 million) gain on the disposal of Pulmicort Flexhaler US rights in the first quarter of 2023, and a $712 million (€657 million) gain relating to updates to contractual arrangements for Beyfortus in the second quarter of last year.
New revenue target set
AstraZeneca increased the interim dividend by 7 US cents to $1 (77.6 pence, 10.79 SEK). It also upgraded the guidance for the fiscal year 2024, expecting total revenue and core earnings per share to grow by a mid-teens percentage at CER, compared with a low double-digit to low teens percentage previously.
AstraZeneca CEO Pascal Soriot said: “Building on our strong growth in the first half of the year and continued underlying demand for our medicines we are upgrading our FY 2024 guidance for both Total Revenue and Core EPS.”
He also set a new revenue target of $80 billion (€73.8 billion) by 2030. “This is a clear reflection of the substantial growth potential we see from both our approved medicines and those in our late-stage pipeline.” Cancer treatment has been a focus for Pascal Soriot since he took the helm in 2012, which has been evidence of the success of the British firm.
Looking at weight-loss drug options?
Looking ahead, AstraZeneca may seek a market share in weight-loss drugs for obesity treatment amid the fast-growing demand. At the end of 2023, AstraZeneca and the Chinese biotech Eccogene had reached an exclusive licence agreement for ECC5004, an oral once-daily pill.
The treatment is expected to be cheaper than the current popular shots from Novo Nordisk, which requires an injection. The deal marked Astra’s ambition to compete with global rivals, such as Novo Nordisk and Eli Lilly & Co., which may lead the firm to further acceleration in growth.
