Competition to AstraZeneca's cholesterol drug Crestor plagued the company's first quarter, but the company said today it would return to sales growth in 2018.
AstraZeneca's product sales dropped by two per cent this quarter to $5bn (£3.7bn) as Crestor sales fell due to competition in the market and higher costs.
The company said its total revenue had fallen by four per cent to $5.2bn from $5.8bn in the fourth quarter of last year.
In addition, core operating profit slumped 46 per cent to $896m down from $1.7bn last quarter.
Earnings per share fell by 37 per cent down to $0.27 and AstraZeneca's share price fell by three per cent on the results this morning.
Why it's important
Whilt AstraZeneca noted a decrease in Crestor sales especially in the EU and Japan, several new drugs such as cancer drug Imfinzi and asthma medication Fasenra sold well. Imfinzi sales totalled $62m, up from $19m in the whole of 2017, and Fasenra sales reached $21m.
The company said that it expects to see sales growth again by the end of the year. However, in the last few years the company has been struggling with patents for its most valuable products expiring.
Steve Clayton, fund manager of the HL Select UK Income Shares fund, said: “Q1 looks to have been a little weaker than expected, largely due to Crestor's sales proving to be very weak, but the company is reiterating its view that full year product sales will return to growth as the patent expiries fade into history and newly launched oncology and respiratory treatments ramp up their sales volumes.”
What AstraZeneca said
Chief executive of the company Pascal Soriot said:
Encouraging launches and strong performances from our newer generation of medicines made a significant contribution to product sales in the quarter, paving the way for our anticipated return to growth in 2018.
The performance was in line with our expectations and guidance for the year is unchanged … With our transformation coming into sharper commercial focus as the year progresses, we are confident of delivering on out goals.
The company's results were weaker than expected, but it promises sales growth again by the end of the year.