By Eva Mathews and Maggie Fick
(Reuters) -AstraZeneca expects to boost 2024 revenue and profit on the back of its blockbuster cancer drugs, but lower than expected fourth-quarter profit dragged the London-listed drugmaker's shares down more than 5% on Thursday.
In almost a decade since AstraZeneca (NASDAQ:AZN) fended off a takeover by U.S. rival Pfizer (NYSE:PFE), CEO Pascal Soriot has rebuilt the Anglo-Swedish drugmaker's pipeline, which includes 13 blockbuster medicines, meaning those that generate more than $1 billion in annual sales.
Lung cancer drug Tagrisso sales grew 9% in 2023 while revenue from Imfinzi, another therapy, jumped 55% and leukaemia drug Calquence sales rose by 23%. Revenues from rare disease drugs like Ultomiris and diabetes drug Farxiga have also swelled.
AstraZeneca has responded to analysts' predictions of a slowdown in growth as COVID-19 medicine sales decline by moving into the fast-paced respiratory syncytial virus (RSV) vaccines and the obesity drugs race through several deals last year.
AstraZeneca's infant RSV shot, co-developed with Sanofi (EPA:SASY), was seeing strong demand and following its approval in China, the company plans to substantially increase capacity in 2024, Chief Financial Officer Aradhana Sarin said in a post-earnings call with reporters.
Though the drugmaker reported slightly better than expected fourth-quarter revenue, profit was short of analyst estimates, hurt by a step up in R&D and price reductions for some medicines in emerging markets. The miss was the first in eight quarters, according to LSEG data.
Its shares dropped to an over two-month low of 97.8 pounds by 1212 GMT, becoming the top loser on London's blue-chip index.
Some analysts said a strong 2024 outlook should dispel concerns among some observers about slowing growth.
AstraZeneca expects total revenue and core earnings per share (EPS) to increase by percentages in the low double-digits to low-teens this year.
Other analysts, including those at Citi and Jefferies, flagged some potential issues for 2024, including fewer than normal major research and development updates expected from the drugmaker.
"We have some longer-term concerns over the therapeutic diversification within the company, however strong the underlying talent and science," Citi said in a note.
Soriot also said the sale of contract drugmaker Catalent to the parent of Novo Nordisk (CSE:NOVOb) this week demonstrates the importance of building an independent supply chain.
AstraZeneca is a client of Catalent for some of its drug manufacturing, but it is working to boost its in-house capacity to cut reliance on contract drugmakers, Soriot added.