UK-based drug maker AstraZeneca Plc (AZN, AZN.L) reported Thursday a few good news after posting an increase in second-quarter profit. The company raised its core earnings per share target for the full year, doubled its share repurchase target to $2 billion, and announced the US endorsement of its investigational blood clot treatment drug Brilinta.
The company announced that an Advisory Committee of the US Food and Drug Administration has voted 7 to 1 to recommend the FDA to approve Brilinta (ticagrelor) for acute coronary syndromes, such as chest pains and heart attacks.
The review by the Advisory Committee, part of the FDA's evaluation of the New Drug Application submitted for ticagrelor in the latter part of last year, is based on the results of the large, head-to-head patient outcomes study, the company said.
For the second quarter, the company's profit before tax increased to $2.92 billion from $2.61 billion in the previous year. Core pre-tax profit was $3.53 billion, up from $3.36 billion in the preceding year.
Profit attributable to owners of the parent improved to $2.11 billion from $1.71 billion in the prior year. Earnings per $0.25 ordinary share for the period were $1.45, higher than $1.18 in the year-ago period.
Core earnings per share for the quarter increased 9% to $1.79 from $1.64 in the second quarter 2009, benefited from lower net finance expense and a lower effective tax rate. On average, three analysts polled by Thomson Reuters expected the company to earn $1.60 per share for the quarter. Analysts estimates typically exclude special items.
Revenues for the quarter grew 3% to $8.18 billion from $7.96 billion in the same quarter last year. At constant exchange rates, the growth was 1%. Analysts anticipated revenues of $8.13 billion for the quarter.
Revenues generated from the US decreased to $3.4 billion from $3.55 billion in the prior year, mainly due to the generic competition for Toprol-XL, Pulmicort Respules and Casodex. Western Europe revenues were $2.21 billion, marginally down from $2.24 billion in the previous year.
Revenues from established Rest of World (ROW), comprising Australia, Canada, Japan and New Zealand, increased 15% to $1.28 billion from $1.1 billion in the prior year.
Emerging ROW, which comprises Brazil, China, India, Mexico, Russia, Turkey and all other ROW countries, posted revenues of $1.29 billion, up 22%, compared to $1.06 billion in the year earlier. According to the company, revenue in markets outside the US increased by 5% at constant exchange rates, largely due to the 16% increase in emerging markets. Emerging markets accounted for about 75% of the revenue growth outside the US.
Gastrointestinal total revenues increased 1% to $1.56 billion, Cardiovascular sales grew 8% to $2.38 billion, with Crestor sales growing 23% during the quarter. In June end, AstraZeneca had announced that the US District Court, District of Delaware ruled in its favor that the substance patent protecting its cholesterol drug Crestor is valid and enforceable.
Revenues from Respiratory and Inflammation were $1 billion, almost flat with last year, while revenues from Oncology declined 11% to $1.07 billion. Sales in the Neuroscience division grew 6% to $1.71 billion, while sales from Infection and Other dropped 14% to $266 million.
Operating profit increased to $3.03 billion from $2.85 billion last year. Core operating profit for the quarter was $3.65 billion.
David Brennan, chief executive officer said, "Our second quarter performance reflects continued strong growth in our Emerging Markets and good performance for key brands Crestor, Seroquel and Symbicort. While revenue and Core EPS comparisons become more challenging in the second half of the year, we have increased our full year financial targets."
For the first-half, profit before tax improved to $6.44 billion from $5.61 billion in the preceding year. Profit attributable to owners of the parent was $4.88 billion, higher than $3.85 billion in the same period last year. Earnings per $0.25 share for the period were $3.36, up from $2.66 per share in the year-ago period. Core earnings per share for the first half increased 16% to $3.82.
Revenues for the half year grew to $16.75 billion from $15.66 billion a year ago.
Driven by the half year results, the company doubled its share repurchase target. To date, it has completed net share repurchases of $516 million towards its initial target of $1 billion. The Board has now determined that a total of $2 billion in net share repurchases will be completed in 2010.
"Taken together with the expected generic erosion for Arimidex and the absence of a contribution from H1N1 pandemic flu vaccine, as expected, the second half of the year will present a difficult year-on-year comparison for revenue and Core earnings per share," the company said.
Looking ahead to the full year, the company now expects core earnings in the range of $6.35 to $6.65 per share, based on the January 2010 average exchange rates for its principal currencies. Earlier, the company had projected core earnings per share target for the full year in the range of $6.05 to $6.35. AstraZeneca also anticipates a low single-digit decline in revenue at constant currency terms.
Analysts are currently looking for earnings of $6.28 per share on revenues of $32.55 billion for the year.
In addition, the board has recommended a first interim dividend of $0.70, payable on September 13.
AZN closed Wednesday's regular trading at $51.51 on the NYSE. In the past 52 weeks, the shares were trading in a range of $40.3-$52.09.
AZN.L is currently trading at 3,349 pence, up 146.5 pence or 4.57%, on 2.61 million shares. For the last one year, the shares traded between 2,668 pence and 3,376 pence on the LSE.
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