By Denise Roland
LONDON-- AstraZeneca PLC on Thursday reported an increase in
second-quarter revenue, driven by income from licensing deals,
though profit continued to fall as the company plowed heavy
investment into new drugs it hopes will replace its old
blockbusters.
The U.K.-based drug maker said revenue increased 2% at constant
currency to $6.31 billion in the second quarter, while core
operating profit, which strips out certain one-off items, fell 4%
at constant currency to $1.81 billion. The strong dollar cut into
the results, with revenue down 7% and core operating profit
slumping 11% in reported terms. Analysts surveyed by The Wall
Street Journal expected sales of $5.71 billion and core operating
profit of $1.73 billion. Net profit slumped 12% to $697
million.
AstraZeneca has started including income from partnerships and
licensing deals, what it calls "externalization revenue," in its
top line as this is becoming an increasingly significant revenue
stream for the company. Stripping out the effect of the strong
dollar, product sales fell 1% to $5.84 billion in the second
quarter but externalization revenue increased 54% to $471
million.
The rise in externalization revenue was largely driven by a $450
million upfront payment from Celgene Corporation for the rights to
develop one of Astra's immune-oncology medicines, MEDI4736, in
certain blood cancers.
Write to Denise Roland at Denise.Roland@wsj.com
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