AstraZeneca (NASDAQ:AZN) is gearing up to unveil its third-quarter financial results on November 9, ahead of the market opening. Notably, in the previous quarter, the company pleasantly surprised investors by delivering an impressive earnings beat of 11.34%.
Factors to Take Into Account
AstraZeneca is anticipated to have witnessed robust sales in the third quarter, primarily driven by the strong performance of its key medications. These include cancer drugs like Lynparza, Tagrisso, Imfinzi, and the diabetes medicine Farxiga.
For Lynparza, Tagrisso, and Imfinzi, our internal projections stand at $750 million, $1.54 billion, and $966 million, respectively. Meanwhile, the Zacks Consensus Estimate for these drugs is $748 million, $1.53 billion, and $1.06 billion, respectively.
AstraZeneca collaborates with Merck for the marketing of Lynparza. This partnership, formed in July 2017, involves profit-sharing in the co-marketing of Lynparza and Koselugo.
Lynparza, in partnership with Merck, is approved for the treatment of four cancer types: ovarian, breast, prostate, and pancreatic. The drug’s performance is also being evaluated for additional cancer indications.
Earlier this year, the FDA revoked the emergency-use authorization granted to AstraZeneca’s antibody cocktail medicine for COVID-19, Evusheld. The reason cited was its ineffectiveness against the Omicron subvariants, which account for over 90% of COVID cases in the United States. Consequently, Evusheld product sales are not expected. Moreover, sales from the COVID-19 vaccine, Vaxzevria, are likely to have been negligible due to the completion of many initial contracts.
Given the sharp drop in COVID-19-related product sales, it’s expected that sales in the Vaccines & Immune (V&I) Therapies segment will be relatively modest. Our model predicts V&I Therapies segment sales of around $144 million.
Other drugs offered by AstraZeneca, including Fasenra, Calquence, and newer products like the triple combo COPD treatment Breztri and lupus drug Saphnelo (anifrolumab), are likely to have contributed to sales growth in the upcoming quarterly report. Sales of the respiratory medicine Symbicort, however, may have been adversely affected by pricing pressure in Europe, the United States, and generic competition in Japan.
Our estimates for Fasenra and Calquence revenues stand at $418 million and $651 million, respectively, while our model predicts Fasenra and Calquence revenues of $410 million and $672 million, respectively.
Sales of AstraZeneca’s legacy drugs, such as Iressa, Faslodex, Arimidex, and Casodex, have been under pressure due to rising generic competition, a trend that is likely to have persisted in the soon-to-be-reported quarter.
The Rare Disease drugs segment, added following AstraZeneca’s acquisition of Alexion in 2021, has been experiencing substantial growth in recent quarters. This growth can be attributed to strong demand and geographic expansions for Ultomiris and Strensiq, and it’s expected to continue in the upcoming quarter. Our model predicts revenues of $873 million for Ultomiris and $319 million for Strensiq.
During the first half of 2023, AstraZeneca witnessed a recovery in overall sales in China, driven by rising patient demand, which offset price reductions associated with the National Reimbursement Drug List renewal. This positive trend is expected to persist in the third quarter.
Collaboration and alliance revenues are also anticipated to be significant contributors to AstraZeneca’s topline, with our estimates at $616 million.
AstraZeneca has warned of increased core operating costs in the upcoming quarter due to investments in recent product launches and higher expenses related to new clinical studies for pipeline advancements.
Earnings Track Record
AstraZeneca has demonstrated a strong track record of beating earnings estimates, achieving an average four-quarter earnings surprise of 8.38%. Its performance in this regard has been commendable, with earnings surpassing expectations in each of the last four quarters.
In the year-to-date, AstraZeneca’s stock has faced a decline of 5.7% compared to a 2.8% gain in the industry.
Featured Image: Freepik
