AstraZeneca Plc, the U.K.’s second-biggest pharmaceutical company, reported first-quarter sales that missed analysts’ estimates as some of its best-selling medicines faced generic competition.
Revenue fell 13 percent to $6.39 billion, the London-based company said today in a statement. That missed the $6.55 billion average estimate compiled by Bloomberg. Sales of cholesterol drug Crestor, the company’s biggest seller last year, declined 11 percent to $1.3 billion. Asthma treatment Symbicort, a rival to GlaxoSmithKline Plc’s Advair, generated $826 million, missing the average estimate of $832 million.
AstraZeneca is cutting thousands of jobs and narrowing its research focus to return to growth as patents on drugs that account for more than 40 percent of its sales expire by the end of next year. Chief Executive Officer Pascal Soriot said previously that he favors small to mid-sized purchases of companies and products to generate revenue rather than large “disruptive” deals.
“We knew that revenues would be weak, but people didn’t expect sales for key products to be so weak,” Fabian Wenner, an analyst with Kepler Capital Markets, said in an interview. “People will want to know why Crestor was below expectations. Sales of Symbicort, which I regard as better than Advair, also missed. That could lead to a landslide in estimates.”
AstraZeneca fell 1.9 percent, the biggest decline since Feb. 13, to 3,325.50 pence at the close of trading in London, giving the company a market value of 41.6 billion pounds ($64.2 billion). The stock has returned 24 percent including reinvested dividends in the past year, trailing the 32 percent return for the Bloomberg Europe Pharmaceutical Index.
Profit excluding some items declined 25 percent to $2.32 billion, or $1.41 a share, from $3.1 billion, or $1.87, a year earlier, AstraZeneca said. A reduction in spending on research and development helped earnings beat the average analyst estimate of $1.37 a share compiled by Bloomberg.
For the year, AstraZeneca still expects sales to fall by a “mid- to high-single-digit percentage” at constant exchange rates, and profit to decline “significantly more than revenue,” the company said.
Sales of the antipsychotic Seroquel slumped 60 percent at constant exchange rates to $449 million in the quarter. The ulcer pill Nexium, which has generic rivals in Europe and Canada, slid 1 percent to $940 million and hypertension treatment Atacand fell 47 percent to $168 million.
“The first quarter performance reflects the loss of exclusivity for several large products,” Soriot said in the statement today. “We remain focused on our strategic priorities of returning to growth and achieving scientific leadership.”
Sales of Brilique, a blood-thinner that won European approval in 2010, were $51 million, up from $9 million a year earlier, beating the $43.4 million average estimate compiled by Bloomberg. Soriot said March 21 the drug, also sold as Brilinta, still has blockbuster potential, meaning annual sales would exceed $1 billion, and the company will invest more in marketing.
AstraZeneca will concentrate on respiratory, inflammation and autoimmune diseases, cardiovascular and metabolic illnesses, and cancer. It also plans to double the number of experimental treatments in late-stage development by 2016.
Last month, the company received a “subpoena duces tecum” from the U.S. Attorney’s Office in Boston seeking documents and records related to manufacturing, quality or good manufacturing practices at its facility in Macclesfield, England. AstraZeneca said it intends to cooperate.