Pharmaceutical giant AstraZeneca (AZN) reported third quarter revenues up 18% to $6.1bn in constant currencies, beating analyst expectations by 5%. The shares traded 3.5% higher at £71.68, topping the list of FTSE 100 gainers.
Chief executive Pascal Soriot said, ‘with AstraZeneca growing at pace, our sales guidance has been upgraded for the second consecutive quarter. Another strong performance from our new medicines accompanied impressive results in our key markets, most notably in China, the US and Japan. The performance reinforces our confidence in delivering sustainable earnings growth.’
CORE EARNINGS GUIDANCE MAINTAINED
Despite increasing its revenue guidance, the company kept its core earnings per share target of $3.50 to $3.70 for the full year reflecting the decision to re-invest in the business, particularly in China and new medicines, in order to strengthen the company’s long-term growth profile.
Emerging markets continued to show strong growth, up 29% in constant currencies with China the standout performer recording sales growth of 40%. Emerging markets are the company’s largest region, representing 35% of revenues.
ONCOLOGY AND NEW MEDICINES
New medicines continued their momentum with sales up 62% year-on-year to $2.7bn led by the Oncology (cancer) division. The company’s lung cancer drug Tagrisso saw sales increase 86%, bladder cancer drug Imfinzi increased sales by 184% and breast cancer drug Lynparza reported an increase in sales of 98%. Oncology now represents 37% of total sales.
IMPROVING FINANCES
The company's core operating costs only increased by 11%, showing strong operating leverage, with the core operating margin improving by 5% to 28%.
Cash generation is a key focus for the company and it demonstrated this by generating $1.59bn in the first nine months to 30 September compared with $394m last year.
The company had $3.8bn of net cash at the period end.
