AstraZeneca (NASDAQ:AZN) shares are trading lower premarket July 29 despite Q2 revenue soared on the back of oncology buisiness and the company raised its FY22 revenue outlook seeing growth in COVID therapy Evusheld.
CoreEPS rose +92% Y/Y (at actual exchange rates - AER) to $1.72, while total revenue grew +31% Y/Y to $10.77B. Both the top and bottom lines beat estimates.
Three drugs crossed billion dollar mark in Q2: Diabetes therapy Farxiga's sales grew +51% Y/Y to $1.10B; Lung cancer drug Tagrisso's revenue increased +7% to $1.4B, and Soliris brought in ~$1.03B, even though its sales declined -5% Y/Y.
COVID products together generated $896M: COVID vaccine Vaxzevria sales declined -48% Y/Y to $451, while COVID therapy Evusheld generated sales of $445M in Q2. In the first quarter of 2022 Evusheld sales were $469M.
The British drugmaker said total revenue in 2022 from COVID-19 medicines is expected to be broadly flat versus FY2021 (previously a low to-mid twenties percentage decline) as growth in Evusheld is likely to offset an expected decline in Vaxzevria sales. The majority of Vaxzevria's revenue in 2022 is expected to come from initial contracts.
Sales from Oncology segment rose +15% Y/Y to $3.81B driven by Tagrisso. Lung cancer drug Imfinzi sales grew +15% Y/Y to $695M. Ovarian cancer therapy Lynparza also grew 15% Y/Y to $673M. Lymphocytic leukemia therapy rose +74% Y/Y to $489M
CVRM segment sales increased 14% Y/Y to ~$2.36B, driven by Farxiga.
Rare Disease business grew +6% Y/Y to $1.80B. While Soliris sales fell, Ultomiris sales grew +23% Y/Y to $434M.
Total sales from V&I segment increased +7% Y/Y to $981, majority of which were COVID products.
H1 Reported Operating Profit was ~$1.42B, compared to $3.02B in H2 2021. The company H1 2022 includes a negative impact of ~$2.32B relating to the unwind of the inventory fair value uplift recognized on the acquisition of Alexion.
Dividend: The company said interim dividend declared of $0.93 (76.4 pence, 9.49 SEK) per ordinary share, reflecting the board's intent to increase to $2.90 in FY 2022, as announced at FY 2021.
Board: AstraZeneca also said in a separate release that it wasappointingMichel Demaré as the chair-designate of the board. Demaré will take over when Leif Johansson, current Chair, will retire at the end of the company's annual general meeting in April 2023. Demaré was appointed in September 2019 as an independent non-executive director.
Outlook:
"Given the ongoing performance of our underlying business and the contribution of our COVID-19 medicines, we are updating our revenue guidance for 2022. This has enabled us to increase our R&D investment in the exciting number of pipeline opportunities that can benefit patients and drive long term sustainable growth for our company," said AstraZeneca CEO Pascal Soriot.
The company now expects Total Revenue for 2022 to increase by a low twenties percentage (previously high teens). Meanwhile, Core EPS guidance remains unchanged and is expected to increase by a mid-to-high twenties percentage.
AstraZeneca noted that as previously indicated, Gross Margin from COVID-19 medicines is expected to be lower than the company average.
