(Bloomberg) -- AstraZeneca Plc raised its profit and sales forecast for the year as it was boosted by demand for blockbuster cancer drugs.
Earnings per share, excluding some items, are now expected to rise by a mid-teens percentage. Previous guidance was for profit and sales to increase by as much as a low-teens percentage.
Shares fell as much as 2.6% in early London trading, having risen more than 12% since the start of the year. Analysts from Bloomberg Intelligence and Shore Capital said some costs, such as in research and development, were higher than expected, tightening margins.
Still, Astra reported $1.98 in earnings per share in the second quarter, higher than the $1.95 estimated by analysts surveyed by Bloomberg. The company is increasing its interim dividend by 7 cents to $1. Sales of $12.9 billion for the quarter also beat estimates.
While revenues were strong across several of Astra’s oncology medicines, sales of its antibody drug conjugate Enhertu stood out, increasing by 46%.
Obesity
The British pharmaceutical giant is on a mission to almost double sales to $80 billion and launch 20 new medicines by the end of the decade. Astra’s cancer drugs will be key to hitting its revenue target, while the company is also moving into new treatment areas including weight loss.
Astra expects to announce data from its experimental oral GLP-1 drug later this year, said Chief Financial Officer Aradhana Sarin in an interview with Bloomberg Television. “Our strategy in obesity is not just focused on sort of weight management, but really weight management for patients who have co-morbidities,” she said.
Chief Executive Officer Pascal Soriot has been at the helm since 2012 and won plaudits by boosting the AstraZeneca share price following Pfizer Inc.’s failed takeover attempt two years into his reign. His bet on cancer drugs lifted annual revenue to more than $45 billion by 2023 and he is looking to cement his legacy with a further near-doubling of sales by 2030.
Cancer treatments have been central to Astra’s progress, as it focuses on antibody drug conjugates such as Enhertu, which could potentially be used before chemotherapy. While Astra’s oncology portfolio will be crucial to reaching the sales targets, its early stage work on weight-loss drugs, including a product it licensed from Eccogene Inc. in 2023, have been closely followed by investors.
The company’s key oncology products Tagrisso, Calquence and Enhertu were ahead of estimates, said Jefferies’ Peter Welford in a note. However, he said other cancer drugs Imfinzi and Lynparza were weak.
(Updates with share price, executive and analyst comments from third paragraph.)
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