AstraZeneca to take modest profit from Covid vaccine after global revenues soar
Drugs giant AstraZeneca has revealed that revenues leapt 50 per cent in the latest quarter as it was buoyed by more than $1 billion (£780 million) worth of Covid-19 vaccine sales.
The pharmaceutical group held firm on its earnings guidance for the year as it hailed "strong revenue growth and exceptional pipeline delivery". It saw total revenues jump to $9.87bn for the quarter, with revenues for the year to date up by 32 per cent.
The latest numbers come after the firm, which said it will not take a profit from its coronavirus shot during the pandemic, unveiled plans to set up a separate arm for vaccines and antibody treatments which focus on Covid-19.
The company added that limited profit from the vaccine in the next quarter will offset costs related to its antibody cocktail developed to prevent and treat Covid-19.
AstraZeneca reported that product sales have risen by a third, with the trend set to continue as it announced eight positive phase three trials, including treatments for liver and prostate cancer.
Chief executive Pascal Soriot said: “AstraZeneca's scientific leadership continues to provide strong revenue growth and exceptional pipeline delivery, with eight positive late-stage readouts across seven medicines since June, including our long-acting antibody combination showing promise in both prevention and treatment of Covid-19.
“The addition of Alexion furthers our commitment to bring transformative therapies to patients around the world, and I am proud of our colleagues' ongoing dedication and focus.”
He added: “Our broad portfolio of medicines and diversified geographic exposure provides a robust platform for long-term sustainable growth. Following accelerated investment in upcoming launches after positive data flow, we expect a solid finish to the year and our earnings guidance is unchanged.”
Nicholas Hyett, equity analyst at financial services group Hargreaves Lansdown, said: “The acquisition of Alexion means Astra’s sales numbers have soared. But impairments, additional operating costs post acquisition, new drug launches and the fact the group still makes no profit on vaccine sales all mean profit margins are down substantially.
“Some of those are in line to be sorted in short order. The group plans to build a modest profit into new vaccine orders going forwards and we’d expect some efficiencies from the Alexion merger – especially in areas like sales and administration.
“The up-front spend on new drug launches should also pay dividends starting from next quarter,” he added.
Adam Vettese, analyst at multi-asset investment platform eToro, noted: “Covid vaccine maker AstraZeneca has reported a reasonably robust set of numbers, but won’t set shareholders alight as it looks to move forward from the pandemic.
“The challenge for AZ now is where next. It has produced a successful (if at times controversial) vaccine and its forward earnings guidance has remained unchanged.
“The Covid vaccine itself is providing the firm a small profit, despite the firm previously committing to making the jab a charitable endeavour. While the Covid pandemic is very much still front and centre the firm needs to make sure it continues to progress R&D in other areas to keep pace with its competitors in the future.”
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