AstraZeneca Profit Lifted by Tax Gain
November 10 2016 - 4:08AM
Dow Jones News
By Denise Roland
LONDON-- AstraZeneca PLC's net profit climbed in the third
quarter as a one-off tax windfall helped offset sharply lower sales
of the company's best-selling cholesterol pill, after several cheap
generic versions launched earlier this year.
The drug giant posted net profit of $1 billion for the three
months to Sept. 30, 32% higher than in the same period a year
earlier, while revenue dipped 4% to $5.7 billion. Analysts had
expected net income of $731 million and revenue of $5.87
billion.
Cambridge, England-based Astra said profit was lifted by a $453
million payment relating to agreements between the Canadian tax
authority and those of the U.K. and Sweden. Core operating profit,
a measure that strips out certain one-time gains and losses,
declined 2% to $1.7 billion.
Stripping out currency effects, net profit increased 4%, revenue
fell 4% and core operating profit declined 13%.
Astra is leaning on a string of new drugs such as blood-thinner
Brilinta and cancer drug Tagrisso to return the company to
sustainable growth after years of flat or falling revenue, as old
best-sellers lose out to cheaper copycats after losing patent
protection.
Those new products did drive revenue growth, but not enough to
offset the sharp decline in sales of old blockbusters such as
Crestor--which lost patent protection earlier this year--and
heartburn medicine Nexium. Crestor sales slumped 44% to $688
million in the third quarter, while Nexium revenue declined 20% to
$516 million.
Chief Executive Pascal Soriot has said the company's
recently-launched medicines, plus several still in clinical
testing, will increase revenue to $45 billion by 2023 compared with
$25 billion in 2015. That promise was a key part of his defense
against an unsolicited, and ultimately failed, takeover bid by
Pfizer in 2014.
Astra's revenue was also boosted by $674 million in so-called
externalization revenue, or the proceeds from the sale of rights to
drugs that fall outside its core therapy areas.
The company backed earlier guidance to say it expects a
low-to-mid-single-digit decline for both revenue and core earnings
per share.
Write to Denise Roland at Denise.Roland@wsj.com
(END) Dow Jones Newswires
November 10, 2016 03:53 ET (08:53 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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