Anglo-Swedish drugmaker AstraZeneca on Thursday upped its earnings forecasts for the year as surging sales of cancer medicines offset plummeting sales of COVID vaccines.
The Cambridge-headquartered company matched analysts’ expectations in posting a 5% uptick in third quarter revenues, to $ 11.49 billion, compared to the $ 11.56 billion forecast by 12 analysts, FactSset data shows.
Shares in AstraZeneca AZN, +2.83% AZN, -0.13% increased 3% on Thursday with stock in the drugmaker down 6% over the previous 12 months.
The uptick in AstraZeneca’s revenues was largely driven by a 17% increase in sales of cancer drugs at constant exchange rates, to $ 4.66 billion, on the back of 53% higher sales of its cancer immunotherapy drug Imfinzi.
Imfinzi, which was first approved in the U.S. in 2017 and in the European Union the following year, uses altered immune cells to tackle cancers with fewer side effects than chemotherapies or radiation therapies.
The higher sales in AstraZeneca’s oncology division, which accounts for 40% of company revenue, offset a 65% drop in sales from the firm’s vaccine & immune therapies division, to $ 312 million, due to sharp declines in demand for COVID vaccines.
Excluding lower sales of COVID vaccines across the globe, AstraZeneca’s sales increased in all regions worldwide, apart from China, as the firm showed particularly strong growth in emerging markets.
The company blamed the drop in sales from China on a reduction in promotional activities as the result of an anti-corruption campaign being led by Chinese health authorities aimed at tackling misconduct in the country’s medical industry.
Revenues from AstraZeneca’s U.S. division, which accounts for 42% of all sales, increased 4% at constant exchange rates to $ 4.86 billion, while the company’s European sales jumped 9% to $ 2.39 billion, and its sales in emerging markets outside of China jumped 25% to $ 1.51 billion.
Looking ahead, AstraZeneca said it now expects its core earnings per share for the full-year 2023 will increase at a double-digits to low-teens percentage rate year-on-year, compared to previous forecasts of a high-single digit to low double-digit increase.
Shorecap analysts, led by Roddy Davidson, said that while AstraZeneca shares are trading “broadly in line with the U.S. and European peer group… we continue to believe a premium is warranted based on its earnings growth and pipeline prospects.”