AstraZeneca sales beat forecasts on Covid jab demand

Sales at AstraZeneca soared 60 per cent in the first quarter, boosted by demand for its Covid-19 vaccine and the rare diseases medicines it acquired as part of its acquisition of Alexion.

The UK drugmaker announced sales of $11.4bn, above the analyst consensus of $10.9bn, bolstered by $1.1bn coming from its Covid vaccine and $1.7bn of sales of the drugs it received as part of its $39bn Alexion deal.

Core earnings per share were $1.89, higher than the average forecast of $1.70 and up 20 per cent year on year.

Pascal Soriot, AstraZeneca’s chief executive, unveiled plans for a research and development centre in Cambridge, Massachusetts. The site will bring together AstraZeneca and Alexion employees after the deal is completed in the summer.

Many of the initial contracts for Vaxzevria, the Covid vaccine AstraZeneca developed with Oxford university, are expected to be completed in the second quarter of the year. In the first quarter, the majority of sales were outside the US and Europe.

The company has sold 2.9bn doses of the vaccine but not yet received approval in the US. Last month, AstraZeneca’s research and development chief told the Financial Times that it would consider not submitting the jab for approval by the Food and Drug Administration. On Friday, Soriot said it was still in discussions with the FDA but hoped to reach a conclusion soon.

Revenue from oncology drugs rose 25 per cent to $3.6bn despite lower than expected cancer diagnoses and treatment rates during the Covid pandemic.

AstraZeneca confirmed its full-year guidance at constant exchange rates. It expects total revenue to increase by a high teens percentage and core earnings per share to rise by a mid-to-high 20s percentage.

The forecasts include the contribution from the Covid vaccine. The company expects revenue from Covid medicines overall to decline by a low-to-mid 20s percentage.

Falling sales of the jab are forecast to be partially offset by higher demand for its long-acting antibody treatment Evusheld, which is used preventively to protect the immunosuppressed.

Soriot said it was unfortunate that the UK had not yet placed an order for Evusheld, making it one of the very few developed countries that have not bought the drug.

“It’s a sad situation, quite frankly because people who are immunocompromised are really suffering from the Covid crisis,” he said.

AstraZeneca will make a profit on new contracts for the Covid vaccine, but the majority of revenue in 2022 is expected to come from the initial contracts, which were on a non-profit basis. It warned that the gross margin from Covid medicines was expected to be lower than the company average.

Soriot said it was difficult to forecast demand for new contracts for the vaccine because of the oversupply of Covid jabs around the world. But he that added the vaccine had shown itself to be a “very strong booster”, and that there was increasing attention on ensuring vaccines elicit a response from T cells, an important part of the immune system’s memory.

“There are now more and more people talking about the importance of T cell stimulation and in terms of the long term protection the vaccine offers, but also the broad protection against severe disease,” he said.

Shares in AstraZeneca fell 0.3 per cent to £105.32 in early morning trading on Friday in London.