Astrazeneca profits slide after increased competition, but warns on Trump victory

 
Natasha Clark
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The drugs company hold investment in new products will fuel growth (Source: Getty)

AstraZeneca posted weak quarterly profits this morning, but big pharma companies are expected to benefit from a Trump presidency.

The drugs giant said operating profit was down 29 per cent to $1bn but has pinned its hopes on new cancer treatments next year.

The results

Revenue in the last quarter declined four per cent to $5.7bn as was expected, but earning per share rose 28 per cent to $1.32.

Net profit was $1bn for the quarter, up almost a third from the same period last year.

Research spending remained stable at $1.3bn, and income from sales of new cancer drugs Tagrisso and Lynparza were positive.

The drug-maker also enjoyed a tax benefit of $453m (£364m) due to agreements on transfer pricing arrangements - which gave their profits a slight boost.

Why it's interesting

The company blames the results on the impact of competition from similar versions of its cholesterol-fighter, Crestor.

Read more: Pharma shares are jumping on Trump's victory. Here's why

In July the US Food and Drug Administration approved generic versions of the pill, rejecting a last-ditch and controversial effort by AstraZeneca to stop cheaper competition from reaching pharmacy shelves.

It wants to pin its long term future on new cancer drugs, and cash on on rival's failures.

Shares slipped almost three per cent in London this morning at the news.

Trump's win was expected to be better for drug-makers as Clinton was thought to want to crack down on drug pricing if she won the White House.

But chief executive officer Pascal Soriot said his win wouldn’t alleviate market pressures, however. He also said it was too early to predict how a repeal or substantial modification of the Affordable Care Act—one of Mr. Trump’s campaign promises—would affect the industry.

What the company said

"The performance in the third quarter was in line with our expectations, reflecting the transitional impact from the first full quarter of generic competition to Crestor in the U.S.," Soriot said in a statement.

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