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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 (ALXN - Free Report) 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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