Skip to main content

Market Overview

AstraZeneca COVID-19 Vaccine Costs Hit Q1 Earnings; Cancer Meds, Emerging Markets Save The Day

Share:
AstraZeneca COVID-19 Vaccine Costs Hit Q1 Earnings; Cancer Meds, Emerging Markets Save The Day
  • AstraZeneca Plc (NASDAQ: AZN) generated $275 million in revenue from its non-profit COVID-19 vaccine in Q1. Still, it has not been able to keep up with its costs, resulting in a hit to core earnings by $0.03 and a warning the vaccine effort could continue to affect margins.
  • The company said it cost money to provide an “equitable supply” of the vaccine at no profit, resulting in a “significant impact” on overall profit margins. Q1 Gross profit margins declined 3 percentage points to 74.6%.
  • It reported sales of $7.3 billion above the consensus of $7.1 billion, growing 15% Y/Y. Sales of cancer drugs and growth in emerging markets helped the company beat earnings and sales expectations. Emerging markets revenue of $2.59 billion grew 14% Y/Y.
  • Overall first-quarter profit was $1.56 billion, roughly double a year ago. Core EPS of $1.63 was up 55% Y/Y, surpassing analysts’ consensus of $0.97. 
  • Quarterly sales growth was driven by best-selling lung cancer drug Tagrisso, up 17% to $1.15 billion. Revenues from heart and diabetes drug, Farxiga, jumped by more than half to $625 million on new prescriptions to treat heart failure.
  • Vaccine revenue included delivery of about 68 million doses. Sales in Europe, where it faces a legal case, were $224 million, $43 million in emerging markets, and $8 million in the rest of the world.
  • AstraZeneca said it would apply for U.S. emergency use in the coming weeks, adding global data from late-stage and emerging real-world data following a roll-out after U.S. trials showed the vaccine was 76% effective.
  • In Q1 earnings presentation slides, AstraZeneca said it was ramping up vaccine supplies, and production yields were improving, without giving any details.
  • “We expect the impact of COVID to reduce and anticipate a performance acceleration in the second half of 2021,” Chief Executive Pascal Soriot said in a statement.
  • Guidance: AstraZeneca reiterated its full-year outlook for total revenue increasing by a low-teens percentage, and core earnings per share rising to $5.00 from $4.00, all at constant exchange rates. 
  • However, the guidance does not include any impact from sales of the vaccine and its $39 billion purchase of Alexion, which is expected to close in the third quarter.
  • Price Action: AZN shares are up 3.6% at $53.24 in the premarket trading on the last check Friday.
 

Related Articles (AZN + AZNCF)

View Comments and Join the Discussion!

Posted-In: BriefsBiotech Earnings News Guidance Health Care FDA General Best of Benzinga

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com