British drugmaker AstraZeneca expects overall revenue to rise modestly this year, likely bringing the company within reach of a sales target it set out nearly a decade ago when fending off an attempted acquisition by Pfizer.
Pharmaceutical product revenue will increase by low- to mid-single digit percentages in 2023, despite an anticipated sharp drop in sales from AstraZeneca’s COVID-19 vaccine and treatment, the company said Thursday. Excluding COVID products, revenue will grow by low double digit percentages.
The guidance was strong enough to lift AstraZeneca shares by 6% in Thursday morning trading on the Nasdaq stock exchange, overcoming a narrow miss of Wall Street forecasts for the company’s 2022 revenue. Between sales of its own drugs and money earned from partnerships, AstraZeneca reported $44.35 billion in revenue, just shy of the $45 billion sales goal that company CEO Pascal Soriot set in 2014 as part of his rationale for rejecting Pfizer’s takeover bid.
That target was considered by analysts then to be overly optimistic. But AstraZeneca successfully overhauled its drug portfolio, building a cancer drug division headlined by four blockbuster medicines that combined accounted for nearly $13 billion in revenue. A fifth drug, the breast cancer therapy Enhertu, is expected to soon join those ranks, boosted by clinical trial results that could reshape how oncologists classify and treat the disease. (Enhertu was developed by Daiichi Sankyo and licensed by AstraZeneca.)
Cancer treatments now account for 35% of AstraZeneca’s business, compared to 11% in 2014. However, the company faces tough competition and reported slower-than-expected growth outside of the U.S. for three of those top medicines.
Nearly as consequential to AstraZeneca’s recent growth has been its acquisition of Alexion Pharmaceuticals two years ago. Worth $39 billion, the deal brought in a slate of rare disease drugs, including the high-priced Soliris and Ultomiris, which together generated nearly $6 billion in revenue last year.
More immediately, the pharma company anticipates the bolus of revenue it has earned from its COVID vaccine Vaxzevria and its antibody treatment Evusheld to rapidly diminish. The Food and Drug Administration recently withdrew its authorization of Evusheld as the drug was found to be much less effective against newer coronavirus variants.
The company also forecasts its pipeline of experimental medicines will deliver at least 15 new drugs by 2030, including several closely watched cancer treatments.
“Overall, the picture of the company is one that is aggressively investing in opportunities that should deliver topline and bottom-line value to investors, while managing expenses and generating significant free-cash flow,” wrote Andrew Berens, an analyst at SVB Securities, in a note to clients.