AstraZeneca raised its annual sales and profit forecast for the second time this year on Tuesday, driven by strong demand for its cancer and rare disease treatments, following better-than-expected third-quarter results. The London-based pharmaceutical company reaffirmed its commitment to expanding in the U.S., unveiling a US $2 billion investment in research and development, as well as in manufacturing plants for biologics medicines and cell therapies. This brings the company’s total investment in the U.S. to US $3.5 billion by 2026. The new funding will enhance manufacturing facilities in Maryland, Texas, and California, creating 1,000 skilled jobs in the process.
CEO Pascal Soriot highlighted that AstraZeneca had made significant progress in advancing high-value trials and was working to bring these new treatments to patients quickly. He also noted the strong recognition of the company’s scientific research, with AstraZeneca’s data featured in an unprecedented five Presidential Plenary sessions at major oncology conferences in September. Soriot emphasized that the company’s multibillion-dollar investment reflected the U.S.’s attractive business environment, as well as its talent and innovation capabilities.
In a statement released shortly after the U.S. presidential election, Soriot expressed the company’s commitment to advancing cutting-edge therapies and supporting U.S. leadership in healthcare innovation. He also remarked, “We are maintaining a strong growth trajectory in 2024, with total revenue and core earnings per share rising by 21 percent and 27 percent, respectively, in the third quarter. This growth is driven by increased demand for our treatments in Oncology, Biopharmaceuticals, and Rare Diseases, prompting us to revise our full-year 2024 forecast upwards.”
AstraZeneca has raised its 2024 revenue and core earnings per share growth forecast to the high-teens percentage range, up from the previous estimate of mid-teens growth at constant currency rates. The company’s cancer drug division saw a 21 percent increase in revenue for the quarter, driven by strong sales of its blockbuster treatments Enhertu and Tagrisso, while revenue from the respiratory and immunology therapies segment rose by 24 percent, both at constant exchange rates.
AstraZeneca’s stock has fallen nearly 6 percent this year, lagging behind the broader European healthcare sector, which rose by almost 9 percent. Over the past three months, the shares have dropped around 17 percent, largely due to concerns about the company’s operations in China, where multiple investigations by national authorities have caused investor unease.
Lucy Coutts, investment director at wealth management firm JM Finn, which holds AstraZeneca shares, noted that investor sentiment is heavily focused on the company’s challenges in China. She described the recent drop in share price—wiping out over US $20 billion in market value—as excessive, suggesting the actual impact on the company is likely to be much smaller. Analysts at Barclays indicated that they expect further remarks from CEO Pascal Soriot during an analyst call at 1400 GMT, and believe additional commentary may help reassure investors.
Last week, AstraZeneca disclosed that its China president, Leon Wang, had been detained by Chinese authorities, though the company did not know the reason for his detention. CEO Soriot emphasized the company’s seriousness regarding the situation in China on Tuesday. AstraZeneca has made significant investments in China, the world’s second-largest pharmaceutical market after the U.S., with its Chinese operations contributing 13 percent of total group revenue last year.
AstraZeneca stated last week that its chief financial officer had briefed sell-side analysts on November 6 to address concerns following a report by financial media outlet Yicai, which suggested an expanding fraud investigation in China. This report caused the company’s shares to drop by more than 8 percent. The company reiterated on Tuesday that it has not been notified by Chinese authorities about any investigation into AstraZeneca itself, but it is willing to cooperate if requested.
In the third quarter, AstraZeneca reported US $1.7 billion in revenue from China, a 15 percent increase at constant exchange rates compared to US $1.5 billion in the same period last year. Revenue from the U.S. for the quarter was US $6 billion, reflecting a 23 percent growth at constant exchange rates. Additionally, AstraZeneca, in partnership with Daiichi Sankyo, announced the submission of a new biologics license application in the U.S. for the accelerated approval of its experimental precision drug, datopotamab deruxtecan.
The application is for the treatment of adult patients with a specific type of non-small cell lung cancer who have previously undergone treatment. Analysts and investors viewed this submission positively, seeing it as increasing the likelihood of the drug’s approval for this patient group.
