AstraZeneca forecasts falling revenues
Drugmaker says it expects sales to be down again in 2014 following the expiry of a number of patents last year
AstraZeneca expects its revenues to keep falling this year after loss of income from expiring patents sent the drug company’s sales down in 2013.
The company forecast that group sales this year would drop by a low-to-mid single digit percentage figure. Its earnings per share are likely to fall by a percentage “in the teens”.
Revenue for the year to the end of December fell 8%, including currency movements, to $ 25.7bn (£15.8bn). Operating profit halved to $ 3.71bn after AstraZeneca made a series of acquisitions to boost its pipeline of new drugs.
AstraZeneca’s shares fell by more than 2% to £37.95½ on the company’s outlook for 2014.
Pascal Soriot, AstraZeneca’s chief executive, said: “As far as we are concerned there is no change in our expectations or our understanding of what 2014 can deliver.”
Soriot is investing in research and development to come up with new drugs but has said it could take years before his plan pays off. He said City analysts’ expectations for “a couple of products” could have become more optimistic than the company’s own forecasts.
Soriot added: “As expected, our financial performance for 2013 reflects the ongoing impact from the loss of exclusivity for several key brands. In the near term these headwinds will remain challenging. However, I am confident that we can return to growth faster than anticipated and expect our 2017 revenues will be broadly in line with 2013.”
Soriot reinforced comments made last month that the company would turn round faster than investors expected. Britain’s second-biggest drugmaker has been hit by generic competition for its antipsychotic drug Seroquel. Cheap copycat versions of its heartburn and ulcer drug Nexium will eat into US profits from May.
In addition, AstraZeneca’s top-selling product Crestor, which treats high cholesterol, will face US competition from cheaper copycat versions in 2016.
AstraZeneca is continuing to spend on priority treatments such as for diabetes, where it was strengthened in December by a $ 4bn deal to take full control of its alliance with Bristol-Myers Squibb.
The company is also pinning hopes on its new heart drug Brilinta, which has got off to a slow start. Doubts increased over the treatment’s prospects after US authorities launched an inquiry into a clinical trial used to win marketing approval. The group has 11 programmes for new drugs in late-stage Phase 3 testing, almost double the number a year ago, and 19 that could start late-stage Phase 3 trials this year or next.