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AstraZeneca (AZN) Q2 Earnings In Line, Vaccine Aids Sales

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AstraZeneca’s AZN second-quarter 2021 core earnings of 45 cents per American depositary share (“ADS”) came in line with the Zacks Consensus Estimate. Core earnings of 90 cents declined 2% year over year at constant exchange rates (“CER”).

Total revenues were up 31% on a reported basis and 25% at CER to $8.22 billion in the quarter, driven by higher product sales. Revenues beat the Zacks Consensus Estimate of $7.79 billion.

The company’s COVID-19 vaccine added $894 million to revenues. The company expects to file a biologics license application for its COVID-19 vaccine in the United States in the second half of 2021.

Excluding COVID-19 vaccine sales, total revenues were up 12% at CER.

Shares of AstraZeneca were up 1.7% in pre-market trading on Jul 29, following the announcement of second-quarter results. So far this year, the company’s shares have gained 13.6% compared with an increase of 11.6% for the industry.

Zacks Investment Research
Zacks Investment Research


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All growth rates mentioned below are on a year-over-year basis and at CER.

Product Sales Rise

Product sales rose 27% at CER to $8.1 billion driven by higher sales of new medicines across Oncology and BioPharmaceuticals segments, including relatively newer medicines — Tagrisso and Farxiga.

Collaboration revenues were $175 million, down 23% at CER.

Among AstraZeneca’s various therapeutic areas, Oncology product sales were up 14%. In BioPharmaceuticals, New CVRM product sales were up 16% while Respiratory & Immunology segment gained 21%. Sales of other medicines declined 8%.

Sales in Detail

In Oncology, Lynparza product revenues rose 2% year over year to $588 million on the back of launches in different countries. The drug is the leading PARP-inhibitor drug in the United States. AstraZeneca markets Lynparza in partnership with Merck MRK.

Tagrisso recorded sales of $1.31 billion, up 21% year over year on strong demand as an adjuvant therapy for treating lung cancer patients.

Imfinzi generated sales of $604 million in the quarter, up 19% year over year on strong demand for advanced lung cancer patients.

New drug Calquence generated sales of $280 million in the quarter compared with $209 million in the previous quarter. New drug, Koselugo, approved in April 2020, generated sales of $26 million in the quarter compared with $21 million in the previous quarter.

Sales of legacy cancer drugs — Iressa, Arimidex, Faslodex and Casodex — declined during the quarter. However, sales of Zoladex were up 5%.

In CVRM, Brilinta/Brilique sales were $375 million in the reported quarter, down 18% year over year, primarily reflecting adverse impact of China’s volume-based procurement program.

Farxiga recorded product sales of $734 million in the quarter, up 56% year over year, reflecting growth across all regions. Bydureon sales decreased 20% to $95 million. Sales of Seloken increased 14% to $266 million.

Crestor sales declined 11% to $265 million. Onglyza sales declined 18% to $99 million. Atacand sales were down 61% to $23 million. Byetta sales remained flat at $16 million.

In Respiratory & Immunology, Symbicort sales declined 1% in the quarter to $680 million. Pulmicort sales gained 59% to $167 million.

Fasenra recorded sales of $320 million in the quarter, up 36% year over year, reflecting recovery in new patient starts.

Bevespi, a LAMA/LABA in a pressurized metered dose inhaler, recorded sales of $13 million in the quarter, up 33% year over year.

In Other Medicines, sales of Nexium declined 14% to $336 million while sales of Synagis and Seroquel declined 73% and 19% to $24 million and $21 million, respectively.

Profit Discussion

AstraZeneca’s core gross margin of 73% was down 10 percentage points at CER. Core selling, general and administrative (SG&A) expenses increased 7% to $2.5 billion.

Core research and development (R&D) expenses rose 24% to $1.8 billion. Core operating profit rose 5% to $1.8 billion in the quarter. Core operating margin decreased 5 percentage points to 22% in the quarter.

2021 Guidance Maintained

AstraZeneca provided updated financial guidance to include the impact of the Alexion acquisition. The company completed the acquisition of Alexion Pharmaceuticals earlier this month.

The company expects total revenues to increase by a low-twenties percentage compared with the previous guidance of a low-teens percentage that excluded Alexion impact. Core earnings are expected to remain between $5.05 and $5.50 per share, up from the previous guidance of $4.75 and $5.00 per share.

The guidance does not include any future sales from the COVID-19 Vaccine.

However, AstraZeneca stated that it expects pandemic-led uncertainty to continue going forward.

AstraZeneca PLC Price, Consensus and EPS Surprise

AstraZeneca PLC Price, Consensus and EPS Surprise
AstraZeneca PLC Price, Consensus and EPS Surprise

AstraZeneca PLC price-consensus-eps-surprise-chart | AstraZeneca PLC Quote

Zacks Rank & Stocks to Consider

AstraZeneca currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked companies from the biotech sector are Codexis, Inc. CDXS and Arvinas, Inc. ARVN, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Codexis’ loss estimates have narrowed from 53 cents to 50 cents for 2021 and from 52 cents to 50 cents for 2022 over the past 30 days.

Arvinas’ loss estimates have narrowed from $3.45 to 42 cents for 2021 and from $4.06 to $2.98 for 2022 over the past 30 days. The stock is up 22.3% so far this year.


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AstraZeneca PLC (AZN) : Free Stock Analysis Report

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Arvinas, Inc. (ARVN) : Free Stock Analysis Report

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