AstraZeneca has started to profit from the sale of the COVID-19 vaccine
AstraZeneca (AZN) reported for the third quarter of 2021 better than investors’ expectations in terms of revenue but worse in terms of EPS. Adjusted earnings per share were $1.08, which was below forecasts by 13.6%. However, the company continues to demonstrate strong sales dynamics and plans to profit from the sale of the vaccine.
Thus, AstraZeneca’s revenue amounted to $9.87 billion (+20%, +50% ), beating consensus expectations by 3.6%. All major business lines showed year-on-year growth. The oncology segment gained 18% YoY due to an increase in sales of the most popular drugs. In particular, Tagrisso (+8%) showed strong dynamics in the USA due to improved detection of oncological diseases.
Revenue from sales of Imfinzi (+16%) also increased receipt of approvals for the use of the drug in emerging markets and the expansion of insurance coverage in the EU.
Lynparza (+27%) shows positive dynamics due to the expansion of clinical coverage of the drug. In the segment of respiratory diseases, Pulmicort looked better than others (+44%). In addition, sales of medicines such as Symbicort (+13%) and Fasenra (+34%) also significantly impacted revenue growth.
Proceeds from the sale of the vaccine amounted to $1 billion. Previously, the company distributed it on non-commercial terms, but with the growth of orders, AstraZeneca plans to start making a profit from this business segment.
R&D expenses increased by 67%, as this item considered the impairment of IA (by $1.172 billion) in connection with the acquisition of Alexion (ALXN).
Without considering this effect, R&D costs increased by 34% against the background of increased investments in late-stage cancer research and the development of an anti-venom vaccine and the drug AZD7442 to combat coronavirus infection. SG&A expenses increased by 25%, including amortization of IA related to the acquisition of Alexion (ALXN).
Excluding the latter factor, SG&A costs increased by 19%, as the balance sheet of AstraZeneca now reflects Alexion’s operating expenses and investments in the launch of biopharmaceutical drugs.
The management left the financial forecast for the full year 2021 unchanged. Therefore, we positively assess the AstraZeneca report and maintain the target price for AZN shares at $65 per paper.
