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LONDON (Reuters) -AstraZeneca on Thursday forecast growth in earnings and revenue in 2023 as the British drugmaker seeks to offset the loss of COVID-19 medicines with its roster of cancer, metabolic and rare disease drugs.
The London-listed company said it expects revenue including from its COVID-19 business to increase by a high single-digit to low double-digit percentage this year.
CEO Pascal Soriot said the firm was on a path to deliver at least 15 new medicines this decade.
The company also predicted a return to growth in China, one of its key markets, after reporting a second consecutive quarter of growth on Thursday.
Shares were up 2.4% at 0834 GMT.
The drugmaker reported better-than-expected profit, and revenue just shy of company-compiled analyst estimates for the fourth quarter.
Sales of its best-selling cancer drugs — Tagrisso, Imfinzi and Lynparza — came in just below estimates from Cowen analysts.
Other key medicines, including rare blood disorder drug Soliris and Ultomiris that came with its $39 billion acquisition in 2021 of Alexion (NASDAQ:ALXN), also brought in sales just below Cowen estimates.
Fourth-quarter revenue was also hurt by a decline in sales of AstraZeneca (NASDAQ:AZN)’s COVID-19 vaccine Vaxzevria.
AstraZeneca forecast adjusted earnings per share in 2023 to grow by a “high single digit to low double-digit percentage”, and revenue to increase by a “low-to-mid single-digit percentage”, at constant currency rates.
AstraZeneca shares have outperformed rivals in recent years, gaining 41% since January 2020. Last year they rose 16.4% but are down about 4% in 2023.
The company’s sales in China last year were hurt by lower drug prices while COVID lockdown measures, until the country’s recent abandonment of its zero-COVID policy, have kept some patients from being diagnosed and seeking care.
Sales started to pick up in the second half of 2022 and in the fourth quarter grew by 3% at constant currency rates.
MARGINS
Of key interest to investors is the experimental cancer drug, datopotamab deruxtecan, being evaluated in a keenly anticipated late-stage trial involving lung cancer patients.
Partner Daiichi Sankyo this month said results of that study have been delayed to the second quarter from the first quarter of 2023.
UBS analyst Michael Leuchten said the stock’s relative underperformance this year was likely due to the delay in trial results for the lung cancer drug, and to the higher level of operating expenditure that AstraZeneca flagged last year.
Investors are looking for signals from the drugmaker on margin trends for the year.
Under CEO Soriot’s decade-plus tenure, AstraZeneca has had a phenomenal recovery story – but over the last few years it has very much been top-line driven, said Jefferies analyst Peter Welford.
“We haven’t yet seen that really delivered into an earnings upgrade cycle. So there is a lot of focus on margins,” he said.
The company forecast on Thursday that core operating expenses would increase by a low-to-mid single-digit percentage, citing its investment in recent drug launches and the start of new trials.
