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AstraZeneca (AZN) Stock Up 5% in a Year: What Awaits in 2023?

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AstraZeneca’s (AZN - Free Report) stock has risen 5.1% in the past year compared with an increase of 2% for the industry.

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AstraZeneca boasts a diversified geographical footprint as well as product portfolio with several blockbuster medicines. Key drugs like Brilinta (cardiovascular), Lynparza (ovarian cancer), Farxiga/Forxiga (type II diabetes) and Tagrisso (lung cancer) are driving top-line growth, with AstraZeneca launching them in more markets and an increased number of indications. AstraZeneca now has 12 blockbuster medicines (excluding COVID products) in its portfolio, with sales exceeding $1 billion, including Tagrisso, Fasenra, Farxiga, Imfinzi and Lynparza. These drugs were its key top-line drivers in 2022 with the trend expected to continue in 2023.

Please note that AstraZeneca markets Lynparza in partnership with Merck (MRK - Free Report) .

AstraZeneca and Merck formed a profit-sharing deal to co-market Lynparza and Koselugo in July 2017.

AstraZeneca and Merck’s Lynparza is approved for four cancer types, ovarian, breast, prostate and pancreatic. Lynparza is also being evaluated in an earlier-line setting for approved cancer indications

AstraZeneca’s sales rose 19% on a reported basis and 25% at constant exchange rates (“CER”) to $44.35 billion in 2022. Revenue growth of 25% at CER was better than the company’s guidance of a low 20s percentage increase. Core earnings per share of $6.66 per share rose 26% year over year on a reported basis and 33% at CER, in line with the guided range of high 20s to low 30s percentage.

AstraZeneca’s pipelineis strong. AstraZeneca received 34 approvals in major markets in 2022. With regard to its pipeline, important oncology candidates in late-stage development are datopotamab deruxtecan (NSCLC and inoperable or metastatic HR+ HER2- breast cancer, triple-negative breast cancer), camizestrant (advanced breast cancer) and capivasertib (HR-positive, HER2-low or HER2-negative locally advanced or metastatic breast cancer, mCRPC prostate cancer).

Promising non-oncology pipeline candidates include brazikumab (Crohn’s disease – phase III; ulcerative colitis – phase II) and ALXN1840 (Wilson disease– phase III). Severalphase III data readouts are lined upfor 2023.AstraZeneca expects to get FDA approval for Beyfortus/nirsevimab, its respiratory syncytial virus vaccine for protection in all infants in 2023 as it is under review in the United States. Beyfortus was approved in the EU in 2022.Eplontersen is under review for hATTR-polyneuropathy in the United States and in late-stage development for ATTR-cardiomyopathy.

AstraZeneca is set to launch at least 15 new medicines by 2030.

AstraZeneca has its share of challenges. Higher interest rates, inflationary pressure from rising energy prices, significant economic volatility, supply chain pressure and the war in Europe are creating an uncertain macro environment and economic volatility. Sales of its COVID products, Vaxzevria vaccine and Evusheld antibody medicine are expected to decline significantly from the 2022 level in 2023.

Nonetheless, AstraZeneca expects total revenues to increase in the low-to-mid single-digit percentage in 2023 at CER, including its COVID products. Excluding COVID products, total revenues are expected to increase in the low double-digit percentage.

Also in 2023, AstraZeneca expects China sales to return to growth and increase by a low single-digit percentage. AstraZeneca has been seeing slower sales growth in China since the second half of 2021. Sales in China are being hurt due to pricing pressure associated with National Reimbursement Drug List (and volume-based procurement programs. COVID-related lockdowns hurt sales further in 2022.

Zacks Rank & Stocks to Consider

AstraZeneca has a Zacks Rank #3 (Hold).

Some better-ranked drugmakers/biotech companies are Novo Nordisk (NVO - Free Report) and CRISPR Therapeutics (CRSP - Free Report) . While Novo Nordisk has a Zacks Rank of 1 (Strong Buy), CRISPR Therapeutics has a Zacks Rank #2 (Buy).

Estimates for Novo Nordisk’s 2023 earnings per share have increased from $4.15 to $4.43. Estimates for 2024 have jumped from $4.38 per share to $5.19 in the past 60 days. Novo Nordisk’s stock has surged 34.6% in the past year.

Novo Nordisk beat earnings expectations in three of the trailing four quarters. The company delivered a four-quarter earnings surprise of 3.00%, on average.

Loss estimates for 2023 for CRISPR Therapeutics have narrowed from $8.21 per share to $7.54 per share. CRISPR Therapeutics’ stock has lost 31.1% in the past year.

CRISPR Therapeutics beat earnings expectations in two of the four trailing four quarters while missing in the other two. The company delivered a four-quarter earnings surprise of 3.19%, on average.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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