AstraZeneca Reveals COVID-19 Vaccine Sales, But That’s Not Why Stocks Are Rising

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AstraZeneca shares rose 3.4% in early trading on Friday as the Swedish and British pharmaceutical company posted better-than-expected earnings, led by its successful cancer drugs. Chief Executive Pascal Soriot expected the impact of COVID-19 to lessen in the coming months, predicting a “performance acceleration” in the second half of 2021.

The pharmaceutical giant has endured a difficult quarter publicly, under increased pressure from the European Union to deliver vaccine doses, while also being forced to correct “outdated information” in its US trial data. But its financial performance was anything but problematic in the first three months of the year, at least in the eyes of investors and analysts. First-quarter sales increased 15% year-over-year, or 11% at constant exchange rates, to $ 7.32 billion, beating the FactSet analyst consensus by $ 6.98 billion. Once again, the main growth drivers were AstraZeneca’s top-selling cancer drugs, Tagrisso, Imfinzi and Lynparza, as oncology sales increased 20%. Basic earnings per share (EPS) of 1.63, a jump of 55%, convincingly beat consensus estimates of $ 1.41, while earnings before tax rose 72% to 1.61 billion. of dollars. The pharmaceutical giant also finally revealed numbers related to its COVID-19 vaccine, developed in partnership with the University of Oxford. The company has pledged not to benefit from its vaccine, at least for the duration of the COVID-19 pandemic, selling it at cost. AstraZeneca AZN, + 3.78% AZN, + 4.28% delivered 68 million doses worldwide in the first quarter, generating $ 275 million in sales, with $ 224 million coming from Europe. That works out to about $ 4 per dose. However, the development and continued supply of its vaccine had a negative impact of $ 0.03 on the basic EPS. In comparison, the US pharmaceutical company Pfizer PFE, -0.07% expects revenue of $ 15 billion from vaccine sales in 2021, while the American biotech Modern MRNA, + 3.91% has forecast $ 18 billion, much more than that AstraZeneca is likely to generate due to its non-profit commitment. The London-listed company said it would submit to the US Food and Drug Administration for an emergency use authorization “in the next few weeks.” In March, the drug company said it would apply for approval in the first half of April. He reiterated his year-round guidance for income to grow at a “low adolescent cost” percentage and faster growth for core EPS, increasing from $ 4 to between $ 4.75 and $ 5. That guide does not include any impact of COVID-19 vaccine sales and excludes the company’s proposed $ 39 billion acquisition of Boston-based Alexion Pharmaceuticals. London-listed shares rose 3.4% in early trading to 7,650 on Friday, while ADRs were up 3.5% in premarket trading. AstraZeneca’s COVID-19 vaccine may have generated losses in the first quarter, but that almost pales to insignificance due to the growing growth of the company’s cancer drug cohort. The pharmaceutical sector, and AstraZeneca in particular, has been “unduly punished” recently, said CPR Asset Management senior portfolio manager Nicolas Picard. Read: Bristol-Myers Squibb shares fell after gains. This is why. “Its performance in the market [is] without accurately reflecting the fact that it has the best product portfolio of any pharmaceutical company and we expect strong growth in the coming years coupled with renewed investor appetite, particularly as other segments of the healthcare industry open up. completely, ”he said. UBS analysts also see room for the stock to grow, maintaining a buy rating with a price target of 8,000 pence, up from Thursday’s close of 7,398 pence. They also noted that older drugs contributed to the pace of sales, particularly the stomach acid-producing drug Nexium, which benefited from stifled demand in China. Overall, AstraZeneca is in a “good place,” said Hargreaves Lansdown analyst Nicholas Hyett. “A sturdy looking pipe gives him options down the road and Alexion will be an extra shot in the arm on that front.” “If the group can boost its free cash flow as the headwinds of the pandemic subside, it will be at an optimum that few pharmaceutical groups enjoy,” he added.