AstraZeneca’s (LSE: AZN) (NYSE: AZN.US) promise to increase revenues to $45bn by 2023 has been met with plenty of scepticism. It’s easy to see why, as this target will require the company to achieve a 75% increase on 2013 sales within the next decade — a tough target for a company that is expecting sales to fall for the next two years.
This lofty target has sent Astra scrambling for growth. And over the past week or so, it seems as if Astra’s management has really ramped up the progress of their ambitious growth plan.
Multiple transactions
It has been a busy fortnight for Astra. On 24 October, the company reported that it had received a positive opinion from the Committee for Medicinal Products for Human Use of the European Medicines Agency, or EMA regarding the marketing of Lynparza (olaparib), a new ovarian-cancer drug. While this approval and recommendation from the EMA does not constitute a full approval, it’s usually the case that recommendations put forward by the agency are followed across the continent. So, this development was great news for Astra.
A few days after the olaparib opinion, Astra received US Food and Drug Administration approval for the company’s once-daily XIGDUO™ XR drug, which has been designed to treat adults with type 2 diabetes. Diabetes is one of the most prominent illnesses within the US, which means that the approval XIGDUO™ XR was a landmark victor for Astra.
Astra’s string of good news continued, with the announcement at the beginning of this month that the company had completed an asset swap with peer Almirall.
The deal saw Astra pay Almirall approximately $875m, with up to $1.2bn to be paid at a later date for the ownership of the rights for the development and commercialisation of Almirall’s proprietary respiratory business portfolio. These rights include revenues from Almirall’s existing partnerships, as well as its pipeline of investigational novel therapies. This deal is likely to have a significant impact on Astra’s earnings.
And finally, it was announced today that Astra’s global biologics research and development arm, MedImmune, has entered into an agreement to acquire Definiens. Definiens is a privately held company that has pioneered a world-leading data analysis technology, which dramatically improves the identification tumours in human tissue cells.
Ready for growth
There’s no doubt that Astra has been busy recently and the company’s acquisitions as well as drug approvals all add up. Indeed, it is now really starting to look as if Astra has the potential to hit its end-of-the-decade revenue targets as bolt-on acquisitions start to contribute to the bottom line.
What’s more, alongside the above acquisitions and approvals, Astra has more than ten drugs in late-stage trials or under regulatory review. Among the most significant are MEDI4736, which uses the body’s own immune system to fight tumours, and AZD9291, a lung cancer treatment.
All in all, it seems as if the company is really making progress in its quest for growth.
