AstraZeneca forecast a pick up in earnings growth this year as strong demand for its cancer and other new therapies power a drugmaker that has pledged not to make any money from its COVID-19 vaccine during the pandemic.
Last year was a crucial one for the Anglo-Swedish company. It teamed up with the University of Oxford to develop a COVID-19 vaccine, and struck its largest ever deal by buying U.S. drugmaker Alexion, even as the global crisis disrupted healthcare.
AstraZeneca said on Thursday it expected 2021 revenues to rise by a low teens percentage and core earnings of $4.75 to $5.00 per share, as it beat expectations for fourth-quarter sales.
The earnings guidance equates to 18-24% growth, after 15% in 2020, but was a little lower than the $5.10 per share analysts were expecting, as the company flagged more spending this year.
Nonetheless, AstraZeneca’s shares rose more than 2% in morning trade.
The London-listed group said its COVID-19 vaccine was not included in its guidance, adding sales from the shot would be reported separately from the first quarter of 2021.
The two-shot vaccine has been viewed as one of the world’s best bets to escape from the pandemic because it is cheaper and easier to distribute than some rivals.
But its rapid approval has been clouded by doubts over its most effective dosage and interval between doses. Data at the weekend also showed it was less effective against a South African variant of the virus, and the company has been embroiled in a row with the European Union over supply delays.
The company’s shares are now only the 6th most valuable stock in London, losing the top spot it had last summer in a shift some analysts attribute to its vaccine troubles.
“Is it perfect? No it’s not perfect, but it’s great. Who else is making 100 million doses in February?” Chief Executive Pascal Soriot said on a conference call about the vaccine.
The company aims to produce more than 200 million doses per month by April.
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While public interest is largely focused on the vaccine, AstraZeneca’s core business of diabetes, heart, kidney, and cancer medicines has been steadily growing, helping the company to turn around years of decline.
Rounding off its third consecutive year of product sales growth, sales for the three months to December surpassed a company-compiled consensus, while core profit of $1.07 per share was in line with expectations.
Cancer drugs sales, AstraZeneca’s biggest field, jumped 28% in the fourth quarter, led by its best-selling lung cancer drug Tagrisso.
“The company is arguably the poster child for big pharma turnarounds,” said Third Bridge senior analyst Sebastian Skeet.
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