AstraZeneca Plc raised its product sales forecast for 2019 on Thursday after second-quarter results beat analysts’ expectations, thanks to strong sales from cancer medicines and emerging markets, especially China.
The British drugmaker’s shares rose more than 6% to hit a record high of 6,770 pence by 1001 GMT, bringing gains for the year so far to around 14% as Chief Executive Officer Pascal Soriot’s turnaround plan gained traction.
AstraZeneca, which maintained its dividend, reported a rise in drug sales for the fourth consecutive quarter after posting years of decline in sales due to patent losses on older drugs.
“The momentum generated last year continued into the first half, consolidating AstraZeneca’s return to growth based on the strength of our new medicines,” Soriot said. “We are very optimistic for the next few quarters.”
Sales from its oncology unit soared 57% to $2.17 billion (£1.74 billion), accounting for 38% of total product sales, with revenue from the company’s top-seller – lung cancer drug Tagrisso – nearly doubling to $784 million.
The company has moved deeper into cancer therapy through wide-ranging deals, including those for immunotherapy and targeted therapy. Earlier this year, it agreed a multi-billion dollar oncology deal with Japan’s Daiichi Sankyo Co.
AstraZeneca’s focus on China has also resulted in explosive growth, with sales more than doubling since 2012 on the back of partnerships with local players and a softening of the regulatory environment for pharmaceutical firms.
Chinese sales rose 44% in the three-month period to $1.17 billion, accounting for more than half of its sales in the developing world.
The drugmaker, however, has warned that growth may not be sustainable.
“We are very pleased with overall performance of China,” Ruud Dobber, executive vice president, BioPharma, told Reuters, but added the company still expected changing policies in the country to hurt sales of its cholesterol drug, Crestor.
AstraZeneca said it now expects full-year product sales to increase by a low double-digit percentage, compared to a previous forecast of high single-digit percentage growth but it maintained its forecast for 2019 core earnings.
Quarterly sales rose 19% to $5.72 billion at constant currency, above analysts’ consensus of $5.45 billion.
Core earnings were 73 cents per share, beating analysts’ average expectation of 61 cents per share, according to a company provided consensus.
Like other players, AstraZeneca has been one of the focal points for concern over supplies of drugs if Britain leaves the European Union without a withdrawal deal later this year.
The company reiterated on Thursday that it was prepared for the breakup, even if it was a no-deal exit.
“We are as ready as we can be,” Soriot added.
