AstraZeneca reported lower-than-expected profits and a forecast for this year that failed to allay concerns about margins, sending its shares to the lowest level in more than a year.
Earnings rose to $1.45 (€1.35) a share in the fourth quarter, falling short of analysts’ estimates, as the UK drugmaker spent more to launch new drugs like Airsupra for asthma. The stock dropped as much as 6.8 per cent in London trading, the steepest decline in about seven months.
Chief executive Pascal Soriot is clinching deals to muscle into new fields like weight loss after reaping the benefits of a risky bet on cancer that transformed the drugmaker’s pipeline. Demand for blockbuster cancer medicines like Tagrisso and Lynparza are fuelling sales growth but there is concern about a newer drug called datopotamab deruxtecan, or Dato-DXd, which emerged from a collaboration with Daiichi Sankyo. Investors are waiting to see if it gains regulatory approval this year after mixed results in clinical trials.
Astra entered the obesity drug race late last year with a deal to develop an experimental pill that is still in early-stage tests.
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Earnings per share this year will likely rise by a percentage in the low double-digits to low teens excluding some items, the drugmaker said on Thursday. Sales growth will be similar, it said. The forecast is robust for sales but “just shy” on earnings, suggesting less profit margin expansion than expected, Peter Welford and Lucy Codrington, analysts at Jefferies, wrote in a note to clients. “Margin clarity may be needed for stock upside,” they said.
The drugmaker may raise its estimates as the year advances, according to Bloomberg Intelligence, which called the guidance conservative. – Bloomberg
