AstraZeneca posts lukewarm quarterly results as two candidates get EU approval

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AstraZeneca PLC (LON:AZN) has posted lukewarm quarterly results while separately revealing that two of its drug candidates have been approved in the EU.

Lynparza got the green light for the treatment of metastatic castration-resistant prostate cancer. Meanwhile, Forxiga was approved to treat a form of symptomatic chronic heart failure.

READ: Small chance of vaccine by Christmas says head of Oxford/AstraZeneca trial

Lynparza is the first and only PARP inhibitor – a drug stopping PARP proteins from repairing cancer cells – approved in the EU in patients with advanced prostate cancer, who the firm said historically have poor prognosis and few treatment options.

Prostate cancer is the second-most common type of cancer in men, with an estimated 1.3mln new patients diagnosed worldwide in 2018, while 12% of patients have a BRCA mutation addressed by Lynparza.

Meanwhile, Forxiga was approved to treat symptomatic chronic heart failure with reduced ejection fraction – when the blood being pumped out of the heart is less than the body needs – in adults with and without type-2 diabetes.

It has already been approved in the US for the same indication and is under review in Japan, while Lynparza is also currently approved in several countries for certain types of ovarian, breast and pancreatic tumours.

On track to meet forecasts

In the separate results announcement, the FTSE 100 firm said it is on track to achieve full-year results in line with guidance, with total revenue expected to grow by 8%-12% and core earnings per share (EPS) to increase by 15%-19%.

It is also expecting regulatory decisions on several of its other drug candidates in the months ahead, including the coronavirus (COVID-19) vaccine developed by Oxford University as well as cancer drugs Lynparza, Imfinzi and Enhertu.

In the three months to September 30, 2020, AstraZeneca‘s revenue advanced by 3% to US$6.5bn, of which product sales added 6% to US$6.5bn while collaboration revenue dropped by 79% to US%58mln. Core EPS were 4% lower at US$0.94.

The pharma giant said the fall in collaboration revenue was due to a strong quarter last year while the second half is usually more weighted to the fourth quarter.

“Crucial though a vaccine is for the wider economy, it’s a minor footnote to Astra’s financial statements at the moment. Far more important is the group’s ever-expanding stable of oncology treatments and the work the emerging market sales teams have been doing in expanding the audience for more mature treatments,” analysts at Hargreaves Lansdown noted.

“While oncology is going from strength-to-strength, pandemic related disruption to Chinese hospital treatments is causing Astra a bit of a headache. That’s meant third quarter results are a little more lacklustre than we might have hoped.”

“However, our real bugbear with Astra remains the balance sheet and the fact that, despite recent improvements, cash flow still doesn’t cover the dividend. That should resolve itself in time if recent growth can be maintained, but it’s been a long time coming.”

Shares were flat at 8,523.53p on Thursday morning.

–Adds analyst comment, shares–

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