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Nexium windfall lifts AZ in third quarter

Still to feel effects of generic competition

AstraZeneca nexium

A delay to generic competition in the US for big-selling gastrointestinal drug Nexium helped AstraZeneca (AZ) post a healthy rise in third-quarter revenues, although profit came under pressure.

The quarter had been expected to be a tough one for AZ with a dramatic fall-off in Nexium (esomeprazole) sales, but the drug managed a small rise to $922m as manufacturing compliance problems prevented Ranbaxy from launching a generic version of the drug.

As a result AZ was able to post a 5% increase in revenues to $6.54bn, reversing a series of revenue declines in recent quarters, although operating profit slipped 13% to $1.77bn as a result of AZ's heavy investments in its pipeline in recent months, particularly in the area of immuno-oncology.

Nexium's stability complemented by a strong performance for antiplatelet drug Brilinta/Brilique (ticagrelor), which grew 78% to $127m helped by the resolution of a US probe into the reliability of clinical trial data for the drug.

Onglyza (saxagliptin) for diabetes had a great quarter, bringing in $220m, a 139% hike on last year. Overall, AZ's diabetes franchise doubled in size compared to the third quarter of 2013, but that relates in large part to AZ buying Bristol-Myers Squibb (BMS) out of their diabetes alliance in the interim.

There were also good performances for AZ's respiratory portfolio - headed by Symbicort (budesonide and formoterol) for asthma and chronic obstructive pulmonary disease (COPD) which grew 15% to $967m - as well as its cancer products.

"Brilinta, respiratory and diabetes - our three core franchises - increased sales by 38% in the quarter," said AZ's chief executive Pascal Soriot, who said the increased revenues would be ploughed back into the company's "growth platforms and expanding pipeline." The company will showcase its R&D portfolio at an investor day later this month.

A good showing in the third quarter is a fillip for AZ as the moratorium period for a takeover by from Pfizer comes to an end this month. Pfizer backed away from a rejected £69bn ($120bn) takeover bid for AZ earlier this year - leading to a six-month block on a second offer that comes to an end on November 18 - although the changing rules on tax inversion in the US could make a new approach less attractive.

Meanwhile, AZ also said it is selling Myalept (metreleptin), an approved drug for generalised lipodystrophy, to Aegerion Pharmaceuticals. The latter will pay $325m upfront to acquire the global rights to Myalept, subject to an existing distributor licence with Shionogi covering Japan, South Korea, and Taiwan.

Article by
Phil Taylor

6th November 2014

From: Sales

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