AstraZeneca (AZN) chief executive Pascal Soriot previously said 2016 would be a tough year for the pharma giant, but that the pain would ease in 2017. So far, that prediction has proved prescient. During the first six months of the financial year, the patent expiration of cholesterol drug Crestor in the US prompted a 2 per cent decline in product sales, while costs from recent acquisitions are still working their way through.
The so-called 'growth platforms' - which include areas such as emerging markets, diabetes and new oncology medicines - saw a 7 per cent sales increase, and now contribute more than 60 per cent to overall turnover. New oncology drugs performed particularly well, with lung cancer treatment Tagrisso and ovarian cancer medicine Lynparza helping to generate sales of $251m (£191m).
But the need to stem losses at the top line with new blockbuster medications means the group continues to throw money at drug development. Research and development (R&D) costs were just shy of $3bn, matching the level spent last year, and are expected to continue at that pace for the remainder of 2016. That said, the new product pipeline looks encouraging, with 12 clinical updates expected within the next six months.
Broker Shore Capital has upgraded forecasts to account for currency movements and now expects pre-tax profits of $6.7bn and adjusted EPS of 440ȼ for the year to December 2016, up from $6.4bn and 430ȼ in FY2015.
ASTRAZENECA (AZN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 4,812p | MARKET VALUE: | £60.8bn | |
| TOUCH: | 4811.5-4812p | 12-MONTH HIGH / LOW: | 4,812p | 3,680p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 36 | |
| NET ASSET VALUE: | 1218ȼ* | NET DEBT: | 83% | |
| Half-year to 30 Jun | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (ȼ) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 11.6 | 1.34 | 99 | 68.7 |
| 2016 | 11.0 | 0.69 | 51 | 68.7 |
| % change | -5 | -48 | -48 | - |
Ex-div: 11 Aug Payment: 12 Sep *Includes intangible assets of $41.3bn, or 3,266ȼ a share | ||||
