AstraZeneca lifts outlook as it doubles down on US growth

London/Bengaluru — Drugmaker AstraZeneca lifted its annual sales and profit forecast for the second time this year on Tuesday, helped by strong demand for its cancer and rare diseases medicines, after third-quarter results beat estimates.

The London-listed company doubled down on plans for US expansion, announcing $2bn in new spending on research & development and on plants that manufacture biologics medicines and cell therapies.

That brings the total it will invest in the country to $3.5bn by the end of 2026. The new investments will expand manufacturing sites in Maryland, Texas and California and create 1,000 high-skilled jobs in the country, it said.

“Our multibillion dollar investment reflects the attractiveness of the business environment together with the quality of talent and innovation capabilities here in the US,” CEO Pascal Soriot said the week after Donald Trump won the US election.

Soriot also said the company aimed to enhance development of cutting-edge therapies and “support the US leadership in healthcare innovation”.

AstraZeneca now expects high-teens percentage growth in 2024 revenue and core earnings per share, from a previous forecast of mid-teens percentage growth at constant currency rates.

Revenue from the company’s cancer drugs business grew 21% in the quarter, driven by sales of blockbuster medicines Enhertu and Tagrisso, while revenue from the respiratory and immunology therapies unit grew 24%, both at constant exchange rates.

Shares rose 2% in early trading but by 10am GMT (12am) were down 1.4%. AstraZeneca shares have fallen nearly 6% this year, underperforming a near 9% rise in the wider European healthcare sector.

President detained

Shares have dropped about 17% in the past three months, reflecting market unease with the company’s Chinese business amid multiple investigations by national authorities.

Last week the company said its China president Leon Wang had been detained by Chinese authorities, and that it did not know why. “We take the matters in China very seriously,” Soriot said on Tuesday.

The company has invested heavily in China, the world’s second-largest pharmaceuticals market after the US, with the local business contributing 13% of group revenue last year.

AstraZeneca said last week its CFO had briefed sellside analysts on November 6 to quell concerns about a fraud probe expanding in China after a report by financial media company Yicai a day earlier that led its shares to plunge more than 8%.

The company reiterated on Tuesday that it had not received notification from Chinese authorities that the company itself is under investigation, but if requested will co-operate with the Chinese authorities.

Third-quarter revenue in China came in at $1.7bn, up from $1.5bn a year earlier, representing growth of 15% at constant exchange rates. US revenue in the quarter was $6bn, representing growth of 23% at constant exchange rates.

AstraZeneca also said, with its partner Daiichi Sankyo, it has submitted a new biologics licence application for the accelerated approval in the US for its experimental precision drug datopotamab deruxtecan.

The approval relates to use of the drug for the treatment of adult patients with a type of nonsmall cell lung cancer who have received prior therapies.

Analysts and investors saw the new application as positive, saying it increases the chance of approval of the medicine for that patient group.

Reuters