AstraZeneca Plc (LON: AZN) is up for big financial hit as the heart disease medicine Epanova failed in a test trail. The company’s core earnings in the fourth quarter of 2019 are going to be impacted with a write-down up to an expected $100 million, relating to inventories of the drug.
Phase III STRENGTH trial was not showing many prospects to patients with MDL (mixed dyslipidaemia). The company based on the suggestion from an independent Data Monitoring Committee, opted to close the trial of the drug.
Steven E. Nissen Managing Director, Chief Academic Officer for the Heart and Vascular Institute & Study Chair for the STRENGTH trial, Cleveland Clinic, the United States, stated that "The academic leadership of the STRENGTH trial is a disappointment, but are very content to have had the chance to deal this vital scientific query. He also expressed his satisfaction for the chance to perform the “STRENGTH” test as an excellent partnership between the academic industry and physicians".
The assessment is being undertaken of the continuing value of the around $0.5 billion immaterial assets of Epanova. Any impairment charge will be considered as a non-Core item in the last quarter of the year 2019.
AZN - Overview of AstraZeneca Plc
AstraZeneca Plc is an International, science-led biopharmaceutical enterprise, whose inventive medications are used by millions of patients across the globe. The company concentrates on pioneering science and leadership in 3 of its main therapy areas: Oncology; Renal and Metabolism and Cardiovascular and Respiratory diseases. The company’s technology evaluates the existing and possible opportunity requirements of company’s scientists to ensure they can work with the best apparatus in the field and promote a united relationship with other scientific organisations who may gain from these devices.
AZN - News Updates
On 13th January 2020, the company announced that Lynparza has been regulatory submission has been approved and has been granted Priority Review in the United States for 1st-line maintenance therapy with bevacizumab in advanced ovarian cancer. AstraZeneca and MSD Inc. (popularly known as Merck & Co., Inc. inside the United States and Canada), together have confirmed the New Drug Application for Lynparza. Based on results from the pivotal Phase III PAOLA-1 trial, published in The New England Journal of Medicine, the USFDA (US Food and Drug Administration) granted the Priority Review.
On 6th January 2020, the company reported that the USFDA (US Food and Drug Administration) has given its go-ahead for an additional New Drug Application and approved the Priority Review for Farxiga (dapagliflozin), a drug used to decrease the threat of heart failure or cardiovascular death in grownups.
The company also announced that its medicine Lokelma, which includes sodium zirconium cyclosilicate has received the authorization in China for the medication of grownup patients with symptoms of elevated levels of potassium in the blood, called hyperkalaemia. The drug showed an optimistic outcome and on the basis of the outcome the National Medical Products Administration gave its consent.
AZN – Financial Highlights
On 24th October 2019, the company declared the third quarter and year to date results for the year ended on 30th September 2019.
The company’s year to date product sale rose by 13 per cent (Actual) to $17,315 million which includes third-quarter Product Sales of $6,132 million which was also boosted by 16 per cent (Actual).
Once again, the third quarter reported encouraging performances in sales. The sales growth by therapy area in the third quarter of the year 2019 which includes, Oncology increased by 46 per cent (Actual) to $2,334 million, New CVRM sale which increased by 8 per cent (Actual) to $1,113 million and Respiratory sale which increased by 15 per cent (Actual) to $1,319 million.
The sales growth by region in the third quarter of the year 2019 includes, total Emerging Markets sales which grew by 25 per cent (Actual) to $2,123 million, China sales which increased by 35 per cent (Actual) to $1,283 million, United States sales which increased by 17 per cent (Actual) to $2,025 million, Europe sales continued their return to growth, increasing by 1 per cent (Actual) to $1,139 million and Japan sales increased by 31 per cent (Actual) to $657 million.
The Reported Operating Expense improved by 11 per cent (Actual) in the year to date to $12,871 million, which represented 73 per cent of Total Revenue in the year 2019 as compared to 74 per cent Year to date of 2018. The Core Operating Expense rose by 3 per cent (Actual) to $10,537 million and stood at 59 per cent of Total Revenue as compared to 65 per cent Year to date of 2018, which shows a significant expansion in operating leverage.
The Reported Earnings Per Share was of $0.79 in the year to date of the year 2019, based on a weighted-average number of shares of 1,297 million, represented a decline of 11 per cent (Actual) whereas the Core EPS increased by 39 per cent (Actual) to $2.61. In April 2019, the company completed the issuance of 44.3 million new shares of $0.25 each at a price of £60.50 per share, which led the share capital to $11 million, an improvement in share premium of $3.479 billion, net of transaction expenses of $22 million.
AZN – Share Price Performance
At the time of writing, on 15th January 2020, as at 08:36 AM GMT, the share price of AZN stood at GBX 7,719.00 per share on the London Stock Exchange, up by 0.36 per cent or GBX 28.00 per share, versus previous day’s closing price of GBX 7,691.00 per share. The company’s market capitalisation was at £100.69 billion at the time of writing. The free float and share outstanding of the AZN were reported at £1.31 billion each.
The company’s share attained a 52-week high of GBX 8,227.88 on October 7th, 2019, while it had touched a 52-week low of GBX 5,312.00 on January 28th, 2019.
The beta of the AZN has been reported to be at 0.77; it indicates that the movement in the price of the stock of the company is less volatile, as opposed to the movement of the comparative benchmark index in the previous one year.