Anglo-Swedish pharmaceutical company, AstraZeneca, has revised its earnings forecast for the year following a surge in sales of cancer medicines. Despite a decline in sales of COVID vaccines, the company managed to meet analysts’ expectations with a 5% increase in third quarter revenues.
Positive Financial Performance
AstraZeneca’s third quarter revenues reached $11.49 billion, which closely matched the forecast of $11.56 billion by 12 analysts, according to FactSet data. This growth in revenue has led to a 3% increase in the company’s stock, which had experienced a 6% decline over the past 12 months.
Strong Sales of Cancer Drugs
A significant factor contributing to AstraZeneca’s revenue boost was a notable increase in sales of cancer drugs. Generating $4.66 billion in revenue, this sector experienced a 17% growth at constant exchange rates. The surge in sales was primarily driven by a remarkable 53% increase in purchases of AstraZeneca’s cancer immunotherapy drug, Imfinzi.
The Power of Imfinzi
Imfinzi, approved in the U.S. in 2017 and in the European Union the following year, has revolutionized cancer treatment. By utilizing modified immune cells, it effectively combats cancer with fewer side effects than traditional chemotherapy or radiation therapies. The success of Imfinzi has played a pivotal role in driving sales within AstraZeneca’s oncology division, which accounts for 40% of the company’s total revenue.
Decline in COVID Vaccine Demand
While AstraZeneca’s oncology division flourished, its vaccine and immune therapies division experienced a sharp decline in sales. Revenue plummeted by 65%, amounting to $312 million due to decreasing demand for COVID vaccines. Nonetheless, the strong performance in the oncology sector compensated for this setback.
As AstraZeneca continues to navigate the pharmaceutical landscape, its focus on cancer medicines and innovative therapies demonstrate the potential for future growth and success.
AstraZeneca’s Sales Surge Worldwide, Excluding China
AstraZeneca, a leading pharmaceutical company, experienced a significant increase in sales across various regions globally, with the exception of China. The company achieved remarkable growth, particularly in emerging markets.
In the United States, where AstraZeneca’s sales constitute 42% of its total sales, revenues soared by 4% at constant exchange rates, amounting to $4.86 billion. Moreover, the company’s European sales also saw a significant boost, surging by 9% to reach $2.39 billion. In emerging markets outside of China, AstraZeneca experienced impressive growth, with sales jumping by 25% to $1.51 billion.
Looking ahead, AstraZeneca has revised its forecast for full-year 2023 core earnings per share. The company now anticipates a double-digit to low-teens percentage increase year-on-year, which is an improvement from the previously projected high-single digit to low double-digit growth.
Analysts from Shorecap, led by Roddy Davidson, believe that AstraZeneca’s shares are currently trading in line with its U.S. and European peers. However, they assert that AstraZeneca deserves a premium valuation due to its remarkable earnings growth and promising pipeline prospects.