AstraZeneca (AZN) reported strong earnings Friday, including $22 billion, or 4% revenue growth, in the first half of the year, and kept its 2023 forecast stable.
Last year, the company saw significant business from its COVID-19 vaccine and antibody treatments through the first half, but this year the company reported a $2 million decline. Excluding COVID, AstraZeneca reported a revenue increase of 16% for the first half of 2023.
"Each of our non-COVID-19 therapy areas saw double-digit revenue growth, with eight medicines delivering more than $1 billion of revenue in the first half, demonstrating the strength of our business. Several medicines grew rapidly including, Ultomiris, Imfinzi/Imjudo and Farxiga, with revenues up 64%, 57% and 40%, respectively," said CEO Pascal Soriot in a statement Friday.
When asked why the company didn't raise its guidance on the strong results, CFO Aradhana Sarin told Yahoo Finance the company was acting cautiously as a number of drugs face loss of exclusivity.
"There are some products that are going to decline in the second half. For example, Symbicort is a product that has gone generic in the U.S., and we expect to have generic competition in the second half of the year," Sarin said.
Symbicort is its blockbuster inhaler used to treat asthma and COPD, which accounted for $2 billion, or about 6%, of 2022 revenue.
The China factor
China represents $6 billion in business annually for the company, and AstraZeneca has the largest market share among global pharmaceutical companies operating in the country.
In response to a report that the company was considering a spinoff in China that would be listed in Hong Kong, Sarin reiterated it was a rumor.
"We're constantly evaluating lots of ideas, but 90% of those ideas don't see the light of day. We're very committed to our business in China, but more importantly we're also committed to innovation in China," Sarin said.
The company has been bullish on opportunities to license drugs with China partners, and Sarin said they see this as an avenue for future growth.
Over the last two to three years, there has also been significant investment and growth of the biotech sector in China, Sarin said.
"Now, all the companies, obviously, will not be successful. Many times in early stages there are many companies chasing the same target and chasing the same technology. So what we believe we can bring is the ability to pick the right targets and pick the right opportunities," she said.
Lobbying solo
This year, AstraZeneca became the third company in a short span to quit PhRMA, one of two large trade groups representing the industry's interests in Washington, D.C.
With the passage of the Inflation Reduction Act, which is putting pressure on Medicare drug pricing for companies, the lobbying power of the industry took a hit. Some large pharmaceuticals, as well as PhRMA and the US Chamber of Commerce, have sued the US Health Department (HHS), calling it unconstitutional on the grounds that it violates the companies' rights because the government is setting prices without any recourse for companies.
AstraZeneca has not joined in on those lawsuits, but it did previously sue HHS over a Medicaid program that would expand access to low-cost drugs.
When asked how AstraZeneca is reallotting the funds that aren't going towards its membership in PhRMA, Sarin said she wouldn't comment on how the company is investing, but she said the company is finding different avenues to support that benefit patients.
"The things we would like to see are things that support innovation, things that allow for diversity in clinical trials, things that allow for resilience and building resilience in healthcare systems. Those are the places where we are cooperating and working together both with academia as well as governments on those types of things," Sarin said.
Follow Anjalee Khemlani on Twitter @AnjKhem.
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