Investing.com -- AstraZeneca (LON:AZN) raised its 2024 sales and profit forecasts following stronger-than-expected third-quarter results, reflecting solid demand across its product portfolio and anticipated sales milestones for its cancer drugs.
The company’s Q3 performance benefited from product sales that exceeded expectations by 4%, while EPS rose by 2% above estimates, boosted by broad-based strength despite elevated research and development costs as previously anticipated.
“We dig into the results below, but in our view the company did what it needed to do on a Product Sales perspective and also raised FY24 guidance on top and bottom line,” said analysts at Barclays (LON:BARC) in a note.
Key drivers for AstraZeneca’s results included significant contributions from key products, with Symbicort and Tagrisso exceeding forecasts.
Symbicort's sales beat expectations by 20%, and Tagrisso outperformed by 3%, though these gains were tempered by slight shortfalls in Imfinzi, Imjudo, and Enhertu sales, which reported a 2% decline compared to projections.
Soliris also missed by 10%, yet this was largely offset by Ultomiris, reflecting successful product switches within the portfolio.
Based on this performance, AstraZeneca revised its full-year 2024 guidance, lifting sales and EPS growth expectations to high teens, compared to previous estimates in the mid-teens.
Analysts at BofA Securities observed that this guidance is likely to be in line or slightly ahead of consensus expectations, which stand at approximately 15% for sales.
Furthermore, the company has also indicated confidence in sustained growth going into 2025. AstraZeneca’s CEO highlighted this outlook in a press release, suggesting momentum would continue into the next fiscal year, a key area for discussion in its upcoming investor call.
In addition to its core product performance, AstraZeneca provided updates on ongoing research and regulatory activities.
The company announced it had withdrawn its initial filing for the Dato TL-01 indication and submitted a new biologics license application (BLA) for TL-01 and TL-05, specifically targeting EGFR-mutated non-small cell lung cancer (NSCLC).
Analysts at BofA Securities estimate the second-line EGFR market represents a $500 million to $1 billion opportunity, as consensus expectations have adjusted downward in recent months.
AstraZeneca outlined expectations for pipeline progress and provided guidance around potential headwinds, including the potential impact of volume-based pricing for Farxiga in China and increased generic competition in Europe for Soliris and Brilinta.
Despite these factors, BofA Securities analysts remain optimistic, expecting the company’s growth trajectory to deliver continued revenue gains, albeit with some pressure on operating margins as it works toward a mid-term target of approximately 35%.
AstraZeneca also flagged a strong pipeline of Phase III trials over the next 18 months, which analysts believe could unlock substantial growth opportunities, including the AVANZAR trial for Dato in first-line NSCLC (a projected $10 billion market), Enhertu data in HER2-positive breast cancer, and Camizestrant in ESR1-mutated breast cancer.