AstraZeneca AZN will report first-quarter 2024 results on Apr 25, before market open. In the last reported quarter, the company missed earnings expectations by 1.35%.
Factors to Note
Sales of AstraZeneca’s key medicines, mainly cancer drugs — Lynparza, Tagrisso and Imfinzi — and diabetes medicine Farxiga, are expected to have driven the company’s top line in the first quarter, backed by strong demand trends. Price reductions of some drugs in emerging markets hurt product sales in the fourth quarter, a trend that is likely to have continued in the first quarter of 2024.
Approvals for new indications boosted sales growth of some key drugs like Imfinzi and Farxiga.
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The Zacks Consensus Estimate for Tagrisso, Farxiga and Imfinzi is pegged at $1.51 billion, $1.63 billion and $1.18 billion, respectively.
Our model estimates for Tagrisso, Farxiga and Imfinzi are $1.55 billion, $1.57 billion and $1.2 billion, respectively.
In the third and fourth quarters of 2023, sales of Lynparza were somewhat hurt by declining use of PARP inhibitors class of drugs and some label restrictions for use in second-line ovarian cancer in the United States, a trend that is likely to have continued in the first quarter of 2024.
AstraZeneca’s other drugs, Fasenra, Calquence and newer products, asthma drug Tezspire and lupus drug, Saphnelo (anifrolumab), are likely to have contributed to sales growth in the soon-to-be-reported quarter.
Investors will be keen to know the sales number of AstraZeneca and partner Sanofi’s SNY respiratory syncytial virus (“RSV”) antibody Beyfortus (nirsevimab). AstraZeneca records 50% share of gross profits on sales of Beyfortus in major markets outside the United States received from Sanofi as Alliance revenues. It also records Beyfortus product sales from products supplied to partner Sanofi under the Vaccines & Immune Therapies segment.
Sales of key respiratory medicine, Symbicort, are likely to have declined due to generic erosion in the United States, Japan and Europe. The Zacks Consensus Estimate for Symbicort is $536 million, while our model estimate is $606.4 million.
Sales of AstraZeneca’s major legacy drugs have been declining due to rising generic competition. The trend is likely to have continued in the first quarter.
Sales of AstraZeneca’s Rare Disease drugs like Ultomiris and Strensiq are expected to have been strong.
Alliance revenues are likely to have been an important contributor to the top line, driven by continued growth in royalties and profit share from partnered medicines. Collaboration revenues (upfront and milestone payments) are also expected to have increased substantially in 2024.
The Zacks Consensus Estimate for AstraZeneca’s total revenues is $11.92 billion, while our model estimate is $12.08 billion.
AstraZeneca’s operating costs are expected to have increased due to increased investment in launches for new products, Airsupra, Wainua and Truqap, and increased investment in the pipeline. Investors will look out for the initial sales numbers of these new products.
Key Recent Developments
In March, AstraZeneca announced plans to acquire Fusion Pharmaceuticals FUSN, a Canadian company that makes next-generation radiopharmaceuticals. Fusion has a diversified pipeline of targeted alpha therapy (TAT) programs. These targeted treatments minimize damage to nearby healthy cells and are seen as potential replacements for traditional regimens like chemotherapy and radiotherapy for treating cancer.
Fusion’s key clinical-stage pipeline candidate is FPI-2265, a small molecule-based TAT targeting prostate-specific membrane antigen, in phase II studies for the treatment of metastatic castration-resistant prostate cancer. A phase III registrational study is expected to begin in 2025.
For the acquisition, AstraZeneca will pay a price of $21.00 per share in cash plus a non-transferable contingent value (CV) payment of $3.00 per share in cash on achievement of a specified regulatory milestone. The upfront cash and CV payment add up to a total transaction value of approximately $2.4 billion.
Earnings Surprise History
The British drug giant’s performance has been mixed, with the company exceeding earnings expectations in three of the last four quarters while missing in one. The company delivered a four-quarter earnings surprise of 7.59% on average.
AstraZeneca PLC Price and EPS Surprise
AstraZeneca PLC price-eps-surprise | AstraZeneca PLC Quote
AstraZeneca’s stock has declined 7.5% in the past year compared with an increase of 13.1% for the industry.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for AstraZeneca this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.
Earnings ESP:AstraZeneca’s Earnings ESP is -2.43%. The Zacks Consensus Estimate is pegged at 95 cents per share, while the Most Accurate Estimate is pegged at 93 cents per share. You can uncover the best stocks to buy or sell before they’re reported with ourEarnings ESP Filter.
Zacks Rank: AstraZeneca has a Zacks Rank #3.
Stock to Consider
Here is a biotech stock that has the right combination of elements to beat on earnings this time around.
BioMarin BMRN has an Earnings ESP of +21.30% and a Zacks Rank #3.
BioMarin’s stock has declined 7% in the past year. BioMarin topped earnings estimates in three of the last four quarters while delivering in-line results in one. BMRN delivered a four-quarter earnings surprise of 16.45%, on average. BioMarin is scheduled to release its fourth-quarter results on Apr 24.
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Sanofi (SNY) : Free Stock Analysis Report
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Fusion Pharmaceuticals Inc. (FUSN) : Free Stock Analysis Report
