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AstraZeneca (AZN) to Report Q3 Earnings: What's in the Cards?

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AstraZeneca (AZN - Free Report) will report third-quarter 2021 results on Nov 12, before market open. In the last-reported quarter, the company delivered in-line earnings.

The company’s earnings beat estimates in two of the last four quarters while missing in one and matching the same once. The company has a four-quarter earnings surprise of 2.97%, on average.

AstraZeneca PLC Price and EPS Surprise

AstraZeneca PLC Price and EPS Surprise

AstraZeneca PLC price-eps-surprise | AstraZeneca PLC Quote

AstraZeneca’s stock has risen 26% this year so far compared with an increase of 16.6% for the industry

Zacks Investment ResearchImage Source: Zacks Investment Research

Factors to Consider

Sales of AstraZeneca’s newer medicines, mainly cancer drugs — Lynparza, Tagrisso and Imfinzi — and diabetes medicine Farxiga are expected to have driven the company’s top line in the third quarter. AstraZeneca’s COVID-19 vaccine is also expected to have been a significant contributor to sales in the third quarter.

Sales of Tagrisso in the United States are likely to have been higher on strong demand as an adjuvant therapy for treating lung cancer patients (approved in 2020), partially offset by lower new patient diagnoses due to COVID-19. Strong demand in the first-line setting is likely to have driven sales in Europe. The Zacks Consensus Estimate for Tagrisso sales is $1.39 billion.

Sales of Lynparza, which is marketed in collaboration with Merck (MRK - Free Report) , are likely to have been driven by its expanded use in prostate cancer and first-line ovarian cancer. The Zacks Consensus Estimate for Lynparza sales is $617 million.

Third-quarter sales of Imfinzi are likely to have benefited from strong demand trends in the United States, especially in lung cancer indications. The impact of COVID-19 on lung cancer diagnoses rates is to be seen. The Zacks Consensus Estimate of Imfinzi sales is $621 million.

AstraZeneca’s other major drugs like Fasenra and Farxiga are likely to have contributed to sales growth in the soon-to-be-reported quarter. The recent label expansion approvals for heart failure with reduced ejection fraction (HFrEF) and chronic kidney disease (CKD) indications might have contributed to Farxiga’s sales growth. Farxiga was approved for the HFrEF indication in the United States and EU in 2020 while it was approved for CKD in the United States and EU in 2021. The Zacks Consensus Estimate for Fasenra and Farxiga sales are $321 million and $767 million, respectively.

However, Brilinta sales might have been hurt due to the impact of COVID-19 (reflecting fewer elective procedures) and pricing pressure from the VBP (volume-based procurement) program in China. The Zacks Consensus Estimate for Brilinta sales is $350 million.

Among the legacy drugs, sales of Symbicort might have declined as growth is slowing down in the United States due to lesser contribution from COVID-related volume and increased utilization of the fixed-dose triple combination products. The Zacks Consensus Estimate for Symbicort sales is $629 million.

Sales of most other major legacy drugs have been declining due to rising generic competition. The trend is likely to have continued in the third quarter.

We expect AstraZeneca to discuss individual third-quarter sales numbers of Alexion’s blockbuster rare disease drugs, C5 inhibitors Soliris and Ultomiris, along with the earnings release. The Alexion acquisition was closed in July.

Recent Development

In October, AstraZeneca filed an application seeking Emergency Use Authorization for its investigational long-acting cocktail antibody therapy, AZD7442, for prophylaxis of symptomatic COVID-19. If authorized by the FDA, AZD7442 would be the first such cocktail antibody drug approved for COVID-19 prevention.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for AstraZeneca this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

Earnings ESP: AstraZeneca has an Earnings ESP of -6.51%. This is because the Most Accurate Estimate is pegged at 61 cents while the Zacks Consensus Estimate is pegged at 65 cents per ADS. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: AstraZeneca has a Zacks Rank #4 (Sell).

Stocks to Consider

Here are a few stocks you may want to consider, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle:

Gemini Therapeutics, Inc. (GMTX - Free Report) has an Earnings ESP of +17.61% and carries a Zacks Rank #2, currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ascendis Pharma A/S (ASND - Free Report) has an Earnings ESP of +11.27% and carries a Zacks Rank #3 at present. The company is scheduled to report earnings on Nov 10.

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