Shares in AstraZeneca (LSE: AZN) (NYSE: AZN.US) added 103p to 4,167p during early trade this morning, despite profits continuing to fall as generic competition crimps the sales of its best selling drugs. Profit before tax sunk 18%.
Investors were cheered by a number of cancer and asthma treatments advancing into late stage trials. The lung cancer drug AZD9291 has been granted Breakthrough Therapy designation by the US regulator, the intention of which is to expedite the development of the treatments for life-threatening conditions.
AstraZeneca’s sales were up 3% to $6.4bn at constant exchange rates, boosted by the full consolidation of Bristol-Myers Squibb‘s diabetes franchise, which contributed 2% of revenue growth.
Worldwide sales of blockbuster cholesterol medication Crestor fell 4% to $627m on increasing generic competition, while US sales of heartburn reliever Nexium declined 7% to $484m.
The chief executive, Pascal Soritot, commented:
“I am pleased with the significant progress we are making towards achieving scientific leadership in our core therapeutic areas. We have confirmed our decision to advance four programmes to Phase III in oncology and respiratory disease. The Breakthrough Therapy designation for AZD9291 in non-small cell lung cancer and the Priority Review granted for olaparib in ovarian cancer by the FDA act as a reminder of the distinctive science that AstraZeneca can bring to patients.”
“We are investing in our rapidly progressing pipeline and the key platforms that are the backbone of our strategy to return to growth. To further concentrate organisational focus, we will continue to redeploy our resources in our core priorities and pursue opportunities that maximise the value of our pipeline and portfolio.”
Shares in AstraZeneca hiked 8% earlier in the week on rumours of a £60bn takeover bid from Pfizer. AstraZeneca has a market cap of £52bn and its shares trade at 16 times forecast earnings. The dividend is projected to grow by 1% to 173p per share in 2014.
It’s up to you to decide whether those metrics, today’s results and bid speculation combine to make AstraZeneca a ‘buy’ right now.
