Dive Brief:
- AstraZeneca reported a 5.2% drop in total revenue during the second quarter, mainly driven by a nearly 52% fall in U.S. Crestor sales following the approval of a generic version (rosuvastatin) last May. Crestor sales dropped by $392 million compared to last year's period, representing 61% of the overall decline in total revenue.
- Excluding Crestor, however, the company's other portfolios received a boost from new drugs. Cardiovascular drug Brilinta and diabetes drug Farxiga increased sales by nearly $100 million each when compared to last year. In addition, recently-approved cancer drug Tagrisso nearly doubled its sales to $92 million, boosting the oncology portfolio's year-over-year growth.
- Anticipating Crestor's patent expiry, AstraZeneca has been investing heavily in its pipeline: R&D expenses rose by 4.4% to $2.9 billion in the first half 2016. The company also expressed optimism in its drug development, emphasizing the company has 14 potential new medicines in Phase 3.
Dive Insight:
AstraZeneca and investors had long anticipated the drop in revenues that would proceed Crestor's patent expiry, so the otherwise disappointing results appeared manageable given low expectations.
In fact, AstraZeneca's stock opened with a 3.1% increase this morning.
The market success is partly due to the company's successful framing of its pipeline as a rapidly firming potential source of revenue. In the next six months, the company expects a regulatory decision on cediranib, an ovarian cancer drug in the EU. In addition, according to the presentation, the company seeks to file three more drugs for approval with the FDA and release data for five clinical trials.
That pipeline did take a major hit recently, however, when the FDA rejected AstraZeneca's hyperkalemia drug ZS-9, which had been picked up in a $2.7 billion deal for ZS Pharma.
But the company's big bet is on a new line of oncology treatments. Eight of the anticipated regulatory submissions are for new cancer drugs or expanded indications, and over half of the upcoming trial results are slated to support these submissions.
"Alongside positive results for our first potential Respiratory biologic medicine, benralizumab, and for Tagrisso in second-line lung cancer, we are encouraged by the rapid patient recruitment in our ommuno-oncology durva/treme combination programs," said Pascal Soriot, Chief Executive Officer of AstraZeneca.
"This strong scientific momentum is set to continue, in particular where we anticipate key immuno-oncology data.”
And the increased oncology earnings released this quarter support this strategy. Revenues from AstraZeneca's newest cancer drug, Tagrisso, have risen rapidly over the past three quarters-making oncology the drug portfolio with the highest growth rate (19.9%) this quarter.
Meanwhile, the company's respiratory and autoimmunity drug portfolio grew by a meager 0.1%; the cardiovascular and metabolic drug revenues fell by 11.6%; while the infection and neuroscience product revenues fell by 15.5%.