AstraZeneca profits rise
ASTRAZENECA, the UK’s second-largest drugs company, doubled its 2010 share buyback plan to $2bn (£1.3bn) yesterday after posting strong results and clearing several regulatory hurdles in the US.
Pre-tax profit in the second quarter rose to $6.4bn (£4.1bn) from $5.6bn in the same period a year ago, on sales up three per cent at $8.18bn, the firm said in its quarterly update.
The company upped its earnings per share forecast for the full-year by 30 cents to $6.65.
Sales of cholesterol drug Crestor were particularly strong, rising by a quarter compared with a year earlier. Last month the firm won a three-year legal battle in the US to protect the drug’s patent until 2016.
The company also said it won approval in the US for its patent on a potential money-spinner heart drug Brilinta on Wednesday, giving the firm a chance to recoup losses predicted as several other patents expire.
US revenues have already declined four per cent in the second quarter as cheaper, generic
competitors to its blood pressure, asthma and prostate cancer drugs flooded the market.
Turnover in emerging markets rose 16 per cent, as the firm shifts its focus to non-US customers.
David Brennan, chief executive, told analysts yesterday: “Our emerging market business is a significant proportion of our growth, due to the success of products that are a bit more mature in the developed markets.”
Brennan added: “In many emerging markets, some products have already lost exclusivity, but of some markets are planning to give more exclusivity to new products.”
AstraZeneca said it will double its planned share buyback programme, after scrapping an earlier attempt in 2008. The buyback will mean higher earnings per share and should cushion the firm from future stock market volatility.
The
firm also announced that Dr Bruce Burlington will join the board as a non-executive director from 1 August.
Shares closed three per cent up at £32.97 yesterday.
BARCLAYS BANK
ASTRAZENECA employs a slew of banks to advise on its global finances, but Barclays has taken the lion’s share on the firm’s share buyback programme.
The bank has plenty of experience with such deals, having bought back almost a billion of its own shares between 1995 and 1997. It continues to periodically pick off shares from the stock market as it attempts to concentrate the value of existing stock.
Barclays was heavily involved in AstraZeneca’s bid to buy back shares in 2008, which was halted due to market volatility during the credit crunch but is now going full pelt again.
The banking group has also advised British American Tobacco on its repurchase of two per cent of its total shares in 2007, and helped Marston Hotels bring 45 per cent of publicly traded shares back into the family-run business for £30m. The latest
AstraZeneca buyback move, on 29 June, left around 1.4bn shares in the marketplace. At yesterday’s prices, this values the publicly traded portion of the pharmaceuticals giant at £46bn.