British pharmaceuticals giant AstraZeneca, whose partnership with Oxford University was behind the UK’s Covid-19 vaccine, has revealed a second consecutive year of double-digit sales growth. Revenue from its oncology business that develops drugs used in the treatment of cancer was the growth engine, rising 24% to $11.5 billion.
The biggest contributor to that growth was Targisso, AstraZeneca’s new ‘blockbuster’ cancer treatment. Revenues from treatments for cardiovascular conditions was also up 9% to $4.7 billion, helped along by strong sales of the diabetes medicine Farxiga.
New medicines contributed over half of total revenues after rising by a third and growth was recorded across all geographical regions. The USA led the way, up 13% to $8.8 billion.
Overall, the company’s product sales were up 11% year-on-year to $25.9 billion for the calendar year to the end of December. Total revenue, which includes income from collaborations, rose 10%. Pre-tax full-year profits rose to $3.91 billion from $1.55 billion in 2019.
However, with results in line with previous forward guidance issued by AstraZeneca, the company’s share price has remained relatively stable today. Forward guidance for 2021 is for investors to expect a third year of double-digit growth in revenues expected to be in the low-teens. Core earnings per share are tipped to increase to between $4.75 and $5.
Like most companies offering markets forward guidance over the last year, AstraZeneca did add the cautious caveat that the continuing Covid-19 pandemic does mean “heightened risks and uncertainties”, which it expects to lead to some level of volatility in its performance from quarter-to-quarter.
Based in Cambridge, which is developing into the UK’s life sciences hub, AstraZeneca has been led by current chief executive Pascal Soriot since 20212. Mr Soriot has orchestrated a revival in the company’s fortunes over that period, with the AstraZeneca share price up over 60% since he took the reins.
That’s been achieved through a successful pipeline of new medicines, particularly in oncology, that have returned the company to product sales growth after a period that saw previous blockbusters such as the statin Crestor face new competition. Investors are now keen to see that progress in product sales revenues translate into improved cash flow.
Mr Soriot commented on the full-year results:
“Despite the significant impact from the pandemic we delivered double-digit revenue growth to leverage improved profitability and cash generation.”
Despite not being known as a vaccines specialist, AstraZeneca’s Covid-19 vaccine, developed in partnership with the University of Oxford, has become key to global efforts to fight the virus by virtue of its much lower price point and easier logistics compared to competitors. The Pfizer vaccine, for example, has to be stored at -70C temperatures, making logistics complicated. And it costs $20 a dose compared to $4 for AstraZenica’s.
However, Covid-19 vaccine sales will not, at least for now, contribute to Astra’s bottom line. The company committed to a policy of not making any profit on its vaccine while the Covid-19 pandemic is still classified as a pandemic. That is likely to change if the virus becomes endemic, without being a pandemic, but vaccination programmes continue.
The vaccine was given a boost yesterday by the World Health Organisation recommending its use for all adults, including in regions where new variants could be circulating.
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