AstraZeneca offered an upbeat outlook Thursday that offset a mixed fourth-quarter report, helping AZN stock approach its 50-day moving average.
Shares gapped 4.8% to close at 67.42 on the stock market today.
For the year, the pharma giant expects total sales to increase by a low-to-mid single-digit percentage. Excluding the impact of its Covid products — a vaccine and a treatment — sales are expected to rise by a low double-digit percentage.
AstraZeneca also forecast core earnings growth at a high single-digit to low double-digit percentage. The outlook helps assuage concerns that expenses would be higher in 2023 due to a large number of clinical studies, drug launches and expansions underway, SVB Securities analyst Andrew Berens says.
"Financial guidance for 2023 suggests strong (earnings per share) growth," he said in a report. It also suggests AstraZeneca is a "profitable, commercial company with growth seen as more desirable in this environment."
Berens kept his outperform rating on AZN stock.
AZN Stock: Sales Miss, Earnings Beat
Overall, sales fell 7% to $11.21 billion in the fourth quarter. That missed projections that ranged from $11.25 billion to $11.26 billion, according to FactSet and Berens. Core earnings skidded 17% to $1.38 a share, but topped expectations by 4 cents.
Sales of AstraZeneca's biggest cancer drug, Tagrisso, climbed 2% to $1.34 billion. That missed views for $1.44 billion and reflects a sequential decline, Berens said. Revenue in the U.S. increased due to broader use of Tagrisso in previously untreated lung cancer patients and in patients following surgery. Abroad, Tagrisso sales declined due to Covid headwinds and lower use in more advanced patients, Berens said.
The best growth from cancer drugs came from Calquence. Sales rocketed 49% to $588 million. But that missed more bullish calls for $592 million. Still, the company suggests Calquence is benefitting from growth in market share and new patient starts, AZN stock analyst Berens said.
Revenue from cancer drugs Lynparza and Enhertu also lagged projections at a respective $689 million and $28 million. Berens says Lynparza's drug class — known as PARP inhibitors — is facing headwinds after AstraZeneca and partner Merck withdrew Lynparza from the late-stage ovarian cancer market. The drug failed to show a benefit on overall survival in final-phase testing.
Meanwhile, sales of AstraZeneca's biggest diabetes medicine, Farxiga, surged 39% to $1.18 billion. But sales of Soliris, which AstraZeneca snapped up in its acquisition of Alexion Pharmaceuticals, toppled 22% to $844 million. Soliris treats four diseases of the blood, muscles and central nervous system.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
