AstraZeneca Plc, the second-largest U.K. drug maker, said fourth-quarter earnings fell 33 percent as revenue declined for two of its best-selling drugs and the company spent more to develop and market new medicines.
Profit excluding certain items fell to $1.18 billion, or 76 cents a share, from $1.54 billion, or $1.23, the London-based company said today in a statement. Earnings missed the 85-cent average of analyst estimates compiled by Bloomberg.
AstraZeneca, which turned down a $117 billion offer from Pfizer Inc. last year, faces increasing competition in coming years after its acid reflux drug Nexium lost patent protection and ahead of the 2016 expiry for the cholesterol pill Crestor. The company said today that revenue in 2015 will probably decline by a mid-single-digit percentage, while adjusted earnings will rise at constant exchange rates.
The revenue estimate falls below what analysts predicted and “it’s not clear exactly how management intends to close the gap” to ensure earnings rise, Tim Anderson, an analyst at Sanford C. Bernstein & Co., said in a note.
AstraZeneca’s shares fell 2.9 percent to 45.54 pounds as of 8:28 a.m. in London, paring the gain in the last 12 months to 17 percent.
Chief Executive Officer Pascal Soriot has promised investors that AstraZeneca will return to growth, with annual revenue of $45 billion by 2023. To do that, it’s focusing on boosting sales of its heart and diabetes treatments, and developing new cancer drugs that may be worth $12 billion annually.
AstraZeneca said today it will buy rights to Actavis’s respiratory portfolio in the U.S. and Canada for an initial payment of $600 million and “will continue to seek” partnerships and licensing deals in 2015.
Nexium revenue declined by 16 percent, while Crestor sales dropped 5 percent in the quarter. The two medicines together accounted for a third of AstraZeneca’s 2013 revenue, or $9.5 billion. The company’s patent for Nexium expired in May, although no generic competitor is yet on the market.
Sales of Brilinta, a blood-thinning medicine, climbed 45 percent to $133 million, a sign that Soriot’s emphasis on the heart drug may be working. Revenue from diabetes drugs, another priority for the CEO, also rose.
Total sales for the quarter totaled $6.68 billion, missing the average estimate.
“AstraZeneca has delivered a notably weak fourth quarter and a disappointing sales outlook for 2015,” said Alistair Campbell, an analyst at Berenberg.