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LONDON (Alliance News) - AstraZeneca PLC on Thursday posted particularly strong annual sales growth from its Oncology segment, with lung cancer drug Tagrisso set to become its biggest seller in 2019.
Shares in the pharmaceutical firm were up 5.4% at 6,028.75 pence on Thursday, the second best performer in the FTSE 100 index.
Overall product sales in 2018 were USD21.05 billion, an increase of 4.5% from USD20.15 billion the year before. Consensus was for USD21.00 billion.
Oncology posted product sales growth of 50% to USD6.03 billion from USD4.02. This included USD1.86 billion of Tagrisso sales compared to USD955 million in 2017. This was slightly ahead of the USD1.83 billion consensus for Tagrisso.
"Tagrisso, based on the performance in 2018, is anticipated to be AstraZeneca's biggest-selling medicine in 2019," Astra said.
New Cardiovascular, Renal and Metabolism product sales grew 12% to USD4.00 billion versus USD3.57 billion.
Respiratory sales were up a more modest 4.2% at USD4.91 billion from USD4.71 billion. Within Respiratory products, sales of Astra's asthma and chronic obstructive pulmonary disease drug Symbicort - its best seller of 2018 - fell 8.6% to USD2.56 billion from USD2.80 billion.
Astra's externalisation revenue - which is from collaborations, partnerships, commercialisation, and out-licencing deals - more than halved USD1.04 billion from USD2.31 billion. This was the result of receiving USD997 million from its Lynparza collaboration with Merck & Co Inc in 2017, which didn't repeat.
Overall revenue, which combines externalisation revenue and product sales, was USD22.09 billion, versus USD22.47 billion in 2017. This compares to company-compiled consensus of USD22.05 billion.
Pretax profit for 2018 was USD1.99 billion, a drop of 11% from USD2.23 billion in 2017 as a result of the externalisation revenue decline.
Astra declared a second interim dividend per share of USD1.90 per share, taking its total dividend to USD2.80, flat on 2017.
Chief Executive Pascal Soriot said Astra had closed 2018 "with another strong quarter" and had "returned to growth".
For the three months to December end, overall revenue grew to USD6.42 billion from USD5.78 billion a year before, with product sales up at USD5.77 billion from USD549 billion and externalisation revenue USD649 million versus USD290 million. Fourth-quarter pretax profit was USD730 million, a 79% increase from USD407 million in 2017.
Astra's 2019 guidance is for a high single-digit percentage increase in product sales at constant currency, following a 4% year-on-year rise in 2018.
It is also guiding for core earnings per share of between USD3.50 and USD3.70 at constant currency. In 2018, core earnings per share totalled USD3.46, dropping from USD4.28 in 2017.
The drug maker's core financial measures are adjusted to exclude items including amortisation and impairment, restructuring charges, and legal settlements. All 2019 guidance is provided at constant currency, it noted.
Core operating expenses are set to increase by a low single-digit percentage from USD16.29 billion in 2018. These expenses remained stable from 2017.
Core operating profit, meanwhile, is guided to increase ahead of product sales by a mid-teen percentage over 2018's USD5.67 billion core operating profit. The company's core operating profit in 2017 was USD6.86 billion.
Astra expects its capital expenditure to be broadly stable with restructuring expense down for 2019 compared to USD697 million in 2018. In 2017, restructuring costs came to USD807 million.
"2019 will be a year of focus on continued pipeline delivery and flawless commercial execution. The performance of our new medicines demonstrated the ability of our commercial teams to convert the pipeline into successful medicines," said Soriot.
"As we recently entered a new phase in our strategic development, we have refined our organisation to position ourselves for the next phase of our journey. The changes are designed to further integrate research and development and accelerate decision-making and the launches of new medicines, consolidating what we believe is already one of the most exciting and productive pipelines in the industry. We are also enhancing our commercial units to increase collaboration with our R&D organisation, enabling greater commitment to our main therapy areas; we want AstraZeneca to be more agile, collaborative and focused as we enter a period of sustained growth," Soriot added.
