AstraZeneca raises forecasts after seeing off Pfizer

AstraZeneca raised its sales and earnings forecasts for the year on Thursday, showing resilience after seeing off a $118 billion takeover approach from rival Pfizer two months ago.

Second-quarter sales and earnings both beat expectations, helped by several one-off factors, including a product-related payment from Pfizer worth $200 million.

Chief executive Pascal Soriot has fought hard to demonstrate that AstraZeneca has a strong independent future and does not need the kind of mega-merger offered by its bigger US rival.

He has gained credit for his firm’s pipeline of promising new cancer drugs, while the respiratory business has been boosted by strong demand for Symbicort, which has taken business from GlaxoSmithKline’s rival drug Advair.

AstraZeneca moved to boost its lung drug franchise further on Wednesday by acquiring rights to Spanish group Almirall’s lung treatments in a deal worth up to $2.1 billion.

Sales in the quarter rose 4 per cent to $6.45 billion, despite generic competition to some drugs, generating core earnings - which exclude certain items - up 8 per cent at $1.30 a share.

“The pace of execution of our strategy and the underlying performance of our teams give us confidence to raise 2014 guidance for the full year,” Mr Soriot said in a statement. “We now have one of the most exciting pipelines in the industry.”

Revenue in 2014 is now expected to be in line with 2013 at constant exchange rates - an increase on previous guidance of a low-to-mid single digit percentage decline - and core earnings per share are set for a low double-digit decline, against previous guidance of a percentage decrease in the teens.

Deutsche Bank analyst Mark Clark said the results represented a “big beat” but were flattered by one-time items and the increased outlook for the year was likely to be taken in its stride by the market.

Reuters