In the context of several pharmaceutical companies that reported sales declines in the second quarter due to COVID-19, AstraZeneca represents a rare exception, thanks to the strong performance of its cancer drugs.
In the second quarter, AZ’s oncology portfolio generated $ 2.61 billion, a 24% year-over-year increase with constant exchange rate changes. Key drugs, including lung cancer drug Tagrisso, Merck & Co. Lynparza-associated PARP inhibitor, PD-L1 blocker Imfinzi, and blood cancer therapy Calquence exceeded expectations of industry watchers .
AZ’s best-selling drug, EGFR TKI Tagrisso, still managed to grow to $ 1.03 billion in the second quarter despite negative inventory changes, according to the company.
Imfinzi’s $ 492 million quarterly fundraising also marked a 6.5% increase from the first quarter, thanks in part to a small-cell lung cancer nod that the FDA distributed in late March. And AZ attributed Lynparza’s 52% jump year-over-year, to $ 419 million, to a recent FDA green light on first-line maintenance treatment of HRD-positive ovarian cancer, regardless of BRCA mutation status.
The stellar performance of anticancer drugs was in stark contrast to an 8% decrease in the AZ respiratory department. This was primarily due to the former corticosteroid Pulmicort, which saw sales drop 70% to just $ 97 million in the second quarter, leaving a huge 70% discrepancy between the reported number and the street forecast.
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The reason for the sharp decline? China, the main source of income from the drug. The COVID-19 pandemic significantly reduced the number of patients visiting nebulizer centers and “an unusually benign flu season … significantly reduced [the number of] asthma exacerbations, “CEO Pascal Soriot said Thursday during a conference call.
That drop in turn slowed China’s AZ sales growth to 11% in the second quarter in constant currencies, down from the 17% the country delivered to the drug maker in the first quarter.
China now accounts for about a fifth of AZ’s entire business and has been faithfully generating double-digit sales growth even amid the COVID-19 related slowdown. But recent political tensions between the United States and China, which are AstraZeneca’s largest and second largest markets, respectively, cloud over the future of the British pharmaceutical industry.
Right now, AZ seems to be handling the situation with ease, rubbing his shoulders with both sides. The COVID-19 vaccine candidate, associated with the University of Oxford, AZD1222, was the only non-American program chosen by the Trump administration as part of its Operation Warp Speed initiative. And just a few days ago, Leon Wang, head of international markets for AZ, was the only foreign pharmaceutical executive to attend a business meeting chaired by Chinese President Xi Jinping.
“We always said we are in China … not only will we be there as an office, but we will basically integrate into China,” Soriot told reporters on Thursday, pointing to AZ’s manufacturing footprint, R&D efforts and digital health collaborations in the country.
“AstraZeneca has always been a good example of China’s openness policy and favorable investment by [other parts] of the world, “added Wang.” We are perceived more as a foreign company with local roots than as a totally foreign company. “
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That said, China is a notable element missing from AZ’s COVID-19 vaccine project. So far, the company has signed supply agreements with the US (300 million doses), the UK (100 million doses) and the EU (400 million doses), in addition to a manufacturing and distribution agreement. with R-Pharm in Russia, and with the Indian Whey Institute to provide the injection to low-income countries. And it is in talks with Japan, Brazil and South Korea for the possible introduction of the vaccine in those markets in case the phase 3 efficacy trial proves successful.
So far, AZ has established a global supply chain that can produce 2 billion doses by the end of 2021, and is “working to produce more if needed,” Soriot said. He declined to provide a price for the vaccine after the pandemic, saying it is still too early.
Overall, AZ’s second-quarter product sales increased 9% in constant currencies, and the $ 6.05 billion path recorded 1% before the consensus. Total revenue, which includes profit sharing for the antibody-drug conjugate paired by Daiichi Sankyo Enhertu and the roxadustat anemia drug associated with FibroGen, was $ 6.28 billion in the quarter. The company maintained its guidance for the entire year, expecting total revenue to grow by a high percentage of one to two digits.
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