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AstraZeneca (AZN) Q4 Earnings, Sales Top Despite COVID-19 Woes

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AstraZeneca’s (AZN - Free Report) fourth-quarter 2020 results were impressive as it beat estimates for earnings as well as sales. The company also issued guidance for 2021

Fourth-quarter 2020 core earnings of 54 cents per American depositary share (“ADS”) beat the Zacks Consensus Estimate of 53 cents. Core earnings per share of $1.07 were up 24% year over year at constant exchange rates (“CER”).

Total revenues were up 11% on a reported basis and 10% at CER to $7.41 billion in the quarter, driven by higher product sales. Revenues comfortably beat the Zacks Consensus Estimate of $6.98 billion. However, sales were hurt due to COVID-19.

Shares of AstraZeneca were up 1.1% in pre-market trading on Feb 11, following the announcement of fourth-quarter results. In the past year, the company’s shares have risen 0.8% compared with an increase of 2.8% for the industry.

All growth rates mentioned below are on a year-over-year basis and at CER.

Product Sales Rise

Product sales rose 11% at CER to $7 billion driven by higher sales of oncology medicines and diabetes drug, Farxiga, which made up for the decline in the Respiratory & Immunology franchise.

Collaboration revenues were $399 million, down 4% at CER.

Among AstraZeneca’s various therapeutic areas, Oncology product sales were up 23%. In BioPharmaceuticals, New CVRM product sales were up 7% while Respiratory & Immunology segment declined 2%. Sales of other medicines rose 2%.

Sales in Detail

In Oncology, Lynparza product revenues rose 40% year over year to $496 million on the back of strong uptake in prostate cancer and first-line ovarian cancer. AstraZeneca markets Lynparza in partnership with Merck (MRK - Free Report) .

Lynparza collaboration revenues were down 7% year over year to $325 million. This included $25 million in regulatory milestone payments and $300 million in sales milestone.

Tagrisso recorded sales of $1.16 billion, up 28% year over year. Imfinzi generated sales of $555 million in the quarter, up 29% year over year on strong demand in advanced lung cancer patients, partially offset by the impact of COVID-19.

New drug Calquence generated sales of $182 million in the quarter compared with $145 million in the previous quarter. New drug, Koselugo, approved in April 2020, generated sales of $17 million in the quarter compared with $13 million in the previous quarter.

Iressa sales were down 19% to $67 million. Sales of older cancer drugs, Arimidex, Faslodex and Casodex declined while Zoladex increased.

In CVRM, Brilinta/Brilique sales were $363 million in the reported quarter, down 15% year over year due to the impact of COVID-19 and pricing pressure from the VBP (volume-based procurement) program in China.

Farxiga recorded product sales of $586 million in the quarter, up 40% year over year, reflecting growth across all regions.

Crestor sales declined 1% to $298 million. Bydureon sales declined 12% to $122 million. Onglyza sales declined 21% to $105 million. Seloken sales increased 7% to $200 million. Atacand sales were up 9% to $63 million. Byetta sales were down 30% to $19 million.

In Respiratory & Immunology, Symbicort sales declined 5% in the quarter to $680 million. Pulmicort sales declined 14% to $368 million reflecting fewer nebulization-center visits and reduced demand for elective surgery, especially in China.

Fasenra recorded sales of $283 million in the quarter, up 35% year over year driven by strong demand, partially offset the impact of lower new patient starts due to COVID-19.

Bevespi, a LAMA/LABA in a pressurized metered dose inhaler, recorded sales of $12 million in the quarter, up 4% year over year.

In Other Medicines, sales of Nexium, Synagis and FluMist rose 6%, 24% and 85% to $377 million, $78 million and $179 million, respectively.

Profit Discussion

AstraZeneca’s core gross margin of 78.6% were up two-percentage points at CER. Core selling, general and administrative (SG&A) expenses increased 6% to $2.84 billion.

Core research and development (R&D) expenses rose 12% to $1.71 billion. Core operating profit rose 28% to $1.9 billion in the quarter. Core operating margin increased four percentage points to 25.6% in the quarter.

Full Year Results

AstraZeneca reported revenues of $26.6 billion, up 10% year over year at CER. Product sales increased 11%. The company’s core earnings for 2020 were $2.01 per ADS, up 18% at CER from the year-ago period.

2021 Guidance Issued

AstraZeneca provided guidance for revenues and core earnings in 2021. The company expects total revenues to increase in low-teens percentage. Core earnings are expected to remain between $4.75 and $5.00 per share.

The guidance does not include any future sales from the COVID-19 Vaccine AstraZeneca (C19VAZ) and any material impact of the Alexion Pharmaceuticals acquisition expected to be completed in the third quarter of 2021.

AstraZeneca stated that the uncertainty from the impact of COVID-19 remains and performance between quarters may vary.

Coronavirus Vaccine Approved

AstraZeneca received approval for its coronavirus vaccine, C19VAZ, in December last year in the United Kingdom followed by Europe and a few other countries. Earlier this month, the World Health Organization recommended usage of the vaccine in adult patients. The company recorded $2 million in sales from the vaccine during the fourth quarter.

Other approved coronavirus vaccines include Pfizer (PFE - Free Report) /BioNTech’s BNT162b and Moderna’s mRNA-1273. J&J also submitted a regulatory application to the FDA seeking emergency use approval for its single-shot coronavirus vaccine earlier this month.

Apart from the vaccine, the company is conducting five phase III studies on AZD7442, a long-acting antibody combination therapy for the prevention and treatment of COVID-19.

AstraZeneca PLC Price, Consensus and EPS Surprise

AstraZeneca PLC Price, Consensus and EPS Surprise

AstraZeneca PLC price-consensus-eps-surprise-chart | AstraZeneca PLC Quote

Zacks Rank

AstraZeneca currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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