AZ revenues rise, but it says coronavirus could hit 2020

Product sales up 12% to $23.57bn for the full-year

AstraZeneca’s new drugs powered a surge in revenues in 2019, but chief executive Pascal Soriot thinks the Covid-19 outbreak could weight on its 2020 performance.

Product sales were up 12% to $23.57bn for the full-year, driven by cancer products and turnover in emerging markets, although there was a bit of a slowdown to 8% growth in the fourth quarter. Profits were also squeezed by rising R&D, licensing and roll-out costs for new therapies.

China is one of AstraZeneca’s big contributors to revenue growth, and the uncertainty about the impact of the coronavirus has led the company to peg its 2020 forecast at a “high single-digit to a low double-digit percentage”.

The guidance “assumes an unfavourable impact from China lasting up to a few months as a result of the recent novel coronavirus…outbreak”, says AZ in its results statement.

It added that it will “monitor closely the development of the epidemic” and will provide an update in its first quarter results statement.

Emerging market sales rose 18% to  $2.09bn in the fourth quarter, accounting for a third of AZ’s total sales of $6.3bn, with China up 25% to $1.19bn.

Covid-19 concern aside, AZ’s business continued the recovery that kicked in last year after its lengthy patent cliff.

Oncology sales grew 29% to $2.3bn in the fourth quarter, with its trifecta of cancer immunotherapy Imfinzi (durvalumab), targeted therapy Tagrisso for lung cancer and PARP inhibitor Lynparza (olaparib) for ovarian and breast cancer leading the charge.

Tagrisso consolidated its position as AZ’s top-selling product with a 49% climb to $884m in the fourth quarter, thanks to increased uptake in first-line treatment of EGFR-positive non-small cell lung cancer.

Imfinzi meanwhile grew 62% to $424m, helped by increased use as maintenance therapy for non-small cell lung cancer (NSCLC), while a new US approval for Lynparza in pancreatic cancer contributed to a 68% increase to $351m.

Recently-approved for a new chronic lymphocytic leukaemia (CLL) indication, AZ’s rival to Johnson & Johnson’s blockbuster BTK inhibitor Imbruvica (ibrutinib) – Calquence (acalabrutinib) – also gathered momentum and contributed $56m in the quarter.

However, the FDA approval of Daiichi Sankyo-partnered HER2 drug Enhertu (trastuzumab deruxtecan) for breast cancer – tipped as a $4.5bn blockbuster by some analysts – came too late to register any 2019 sales.

Both these drugs are expected to help drive sales in 2020, however, and Soriot said the coming year “is anticipated to be another year of progress” for AZ, adding that the company is “becoming a better-balanced business, both regionally and through our medicines”.