AstraZeneca share price surges as pharmco returns to growth

Shares in AstraZeneca (LON:AZN) have climbed higher in London this morning as the blue-chip drugmaker disclosed that it had returned to sales growth last year. The company benefitted from the performance of its new medicines which helped offset declining sales from its ‘blockbuster’ drugs like Crestor which continued to face pressure from cheaper generics.

As of 08:50 GMT, AstraZeneca’s ‘share price had added 4.96 percent to 6,005.00p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.38 percent higher at 7,217.89 points. The group’s shares have added more than 23 percent to their value over the past year, as compared with about a 0.1-percent gain in the Footsie.

AstraZeneca returns to growth

AstraZeneca announced in a statement today that the company’s product sales had grown four percent to $21.1 billion last year, reflecting strong performance of the pharmco’s new medicines. Oncology sales rose by 50 percent, with AstraZeneca’s Tagrisso and Lynparza each doubling in sales. Total revenue, however, came in two percent lower at $22.1 billion, pressured by a 50-percent slump in externalisation revenue. Core earnings per share meanwhile fell 19 percent to $3.46.

“Closing the year with another strong quarter, our performance confirmed that AstraZeneca has returned to growth,” the group’s chief executive Pascal Soriot commented in the statement. Going forward, the FTSE 100 drugmaker expects a high single-digit percentage increase in sales for 2019 and core EPS of between $3.50 and $3.70.

Analysts weigh in on results

“Despite the somewhat messy Q4 numbers, guidance for 2019 is likely to be well received with product sales growth of high single digit expected – in-line with consensus at seven percent,” Liberum pointed out, as quoted by Proactive Investors, adding that “some margin expansion should allow for Core EBIT growth at mid-teens to deliver a Core EPS range of $3.50-3.70 at constant currency or $3.43-3.63 in reported terms at current exchange rates”.

The broker reckons that “consensus is at the bottom-end of this range at $3.46 implying room for upgrades”.

As of 09:17 GMT, Thursday, 14 February, AstraZeneca plc share price is 6,005.00p.