Chinese demand for medicines helps Astrazeneca return to growth
Strong growth in Chinese demand for new medicines helped Astrazeneca return to growth in 2018, it said today.
The figures
Product sales grew four per cent in 2018 compared to 2017, to hit $21bn (£16.35bn) in revenue.
Fourth quarter revenue grew to $5.77bn, up five per cent year on year.
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While operating profit fell eight per cent to $3.39bn in 2018, fourth quarter profit grew 57 per cent to $1.08bn.
Earnings per share tumbled in the fourth quarter and for the full year, however, falling 28 per cent to $1.70 for the whole of 2018.
Net debt continued to stack up at the drugmaker, rising to $13bn compared to $12.7bn in 2017.
Why it’s interesting
The pharma giant ended a difficult year on a high, after initially suffering a drop in revenue due to the loss of prominent drug patents as the industry faces the risk of a no-deal Brexit.
But the company welcomed stronger fourth quarter sales, with Chinese sales climbing 28 per cent to $3.79bn, as the popularity of Astrazeneca’s cancer treatment drugs, and fresh patent approvals, underlined its resurgence.
Shares ticked up 3.3 per cent as chief executive Pascal Soriot said cost management would help the drugmaker post growing operating profits for the coming year.
He is currently seeking to simplify Astrazeneca's research and development structure as well as most of the company's commercial operations.
Julie Palmer, partner at Begbies Traynor, said the latest financials “could be just what the doctor ordered”.
However, she warned that the coming year could hold fresh challenges for the industry bigwig, saying: “2019 will prove difficult, with Brexit quickly approaching and the threat of a widening skills gap for industry.
“But, if Astrazeneca can continue to capitalise on the success of its latest drugs and benefit of its latest organisational changes to support its scientific research, then the firm will avoid having to swallow any bitter pills.”
What Astrazeneca said
Chief executive Pascal Soriot said: “2019 will be a year of focus on continued pipeline delivery and flawless commercial execution. The performance of our new medicines demonstrated the ability of our commercial teams to convert the pipeline into successful medicines.
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“As we recently entered a new phase in our strategic development, we have refined our organisation to position ourselves for the next phase of our journey. The changes are designed to further integrate research and development and accelerate decision-making and the launches of new medicines, consolidating what we believe is already one of the most exciting and productive pipelines in the industry.
“We are also enhancing our commercial units to increase collaboration with our R&D organisation, enabling greater commitment to our main therapy areas; we want AstraZeneca to be more agile, collaborative and focused as we enter a period of sustained growth.”