AstraZeneca is taking a different tack in obesity treatment, focusing on combinations in a bid to make a dent in the market currently dominated by Eli Lilly and Novo Nordisk.
The company envisions a future in which its oral weight-loss drug could be combined in a single pill with hypertension, cholesterol or diabetes drugs. AstraZeneca already has some of these in play with Farxiga, a daily pill that treats diabetes, heart failure and chronic kidney disease. The company is also working on a pill for hypertension called baxdrostat and an oral treatment that has shown it can significantly lower LDL cholesterol.
Ruud Dobber, executive vice president of biopharmaceuticals at the giant pharma, says that approach could help AstraZeneca better help people who have extra weight — but don't technically have obesity — and coexisting conditions.
"That makes our strategy unique and potentially very powerful," he told Investor's Business Daily.
On today's stock market, however, AstraZeneca stock shed 1.5% to 78.52. Shares undercut their 50-day moving average, though are still forming a flat base with an buy point at 80.86, according to MarketSurge.
The drop follows a strong second-quarter report, and news that Viking Therapeutics is exploring a monthly injection for weight loss shook companies in the obesity drugs space. Lilly and Novo stocks fell 4.5% and 2.8%, respectively.
AstraZeneca Stock: Sales Beat, But Earnings Fall
Dobber called chronic disease treatment "the unsung hero" of AstraZeneca's portfolio.
That proved the case in the second quarter. Sales from biopharmaceuticals divisions, which includes cardiovascular, respiratory and metabolism drugs, treatments for respiratory and immunology conditions, and vaccines and immune therapies came in at $5.18 billion. Two of the three segments tacked on double-digit growth, helping offset a decline for Covid treatments.
All together, those sales almost reached the $5.33 billion generated by sales of cancer treatments.
"Internally, we are calling (biopharmaceuticals) the unsung hero because there's not much attention on oncology," he told Investor's Business Daily. "But people sometimes forget the importance of chronic diseases and biopharma is the division working on chronic diseases like COPD, asthma, but also diabetes and renal disease."
Overall, the June quarter brought in $12.94 billion in sales, growing 13%. That topped expectations for $12.63 billion, according to FactSet. In constant currency, sales advanced 17%. Core earnings, on the other hand, fell 8% — or 3% excluding the impact of exchange rates — to $1.98 a share. That narrowly topped Wall Street's call by a penny.
Leerink Partners analyst Andrew Berens noted sales of cancer treatments came in 1% ahead of the Street's forecast at $5.33 billion. Oncology sales grew 15% on a strict, as-reported basis.
Among AstraZeneca's biggest moneymakers, revenue from cancer treatments Tagrisso and Imfinzi were mixed. Tagrisso beat forecasts at $1.61 billion, up 8%, while Imfinzi was light at $1.15 billion, also up 13%. Farxiga brought in $1.95 billion, rising 29% to beat expectations by 5%.
AstraZeneca raised its full-year outlook and now expects total revenue and core earnings to increase by midteens percentages. Analysts projected earnings of $8.18 a share and $51.77 billion in sales.
Roche, Sanofi Also Report
In other news, Roche raised its outlook for the year after core earnings in the first half grew 9% in constant currency. Sales also climbed 5% and beat expectations, according to FactSet. The company now expects sales to increase by a mid single-digit percentage. It also calls for a high single-digit jump in core earnings.
Sanofi's earnings and sales also came in above expectations. Sales grew more than 10% in constant currency while earnings rose 4%. The company now expects stable earnings this year, up from its previous outlook for a low single-digit percentage decline.
Roche stock rose 2.8% to 39.62, and Sanofi shares popped 3.9% to 53.19.
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