AstraZeneca says profits slump on legal charges
Anglo-Swedish drugs giant AstraZeneca on Thursday said third-quarter net profits tumbled on the back of competition from generic drugmakers, restructuring costs and massive legal charges.
The group said in a statement that profits after tax sank in the three months to September despite a strong performance in emerging markets and sales of key drugs such as cholesterol treatment Crestor.
During the third quarter, Britain's second-biggest drugmaker was hit by legal charges of 473 million dollars related to ongoing product liability litigation for the anti-psychotic drug Seroquel in the United States.
"We remain firmly on track to achieve our full year financial targets," chief executive David Brennan said in the statement.
"The third quarter performance featured double-digit revenue growth in emerging markets. Revenue also increased in western Europe and established (markets in the) rest of world.
"As expected, the impact of generic competition on several products and the absence of pandemic flu vaccine revenue led to a challenging quarter in the US."
The group said net profits sank 27 percent to 1.55 billion dollars (1.13 billion euros) in the three months to September, compared with 2.12 billion dollars in third quarter 2009.
Revenues fell 7.9 billion dollars in the reporting period from 8.2 billion dollars last time around.
Sales in the United States were adversely affected by generic competition for breast cancer treatment Arimidex, asthma drug Pulmicort Respules and high blood pressure drug Toprol-XL.
The group's results were boosted in the third quarter of 2009 by sales of its H1N1 pandemic influenza vaccine.
AstraZeneca faces a steep drop in sales over coming years. Seven of its drugs, including three bestsellers, face generic competition by 2014 -- a higher ratio than its major European competitors.
Earlier this year, meanwhile, the group agreed to pay a 520-million-dollar fine to settle allegations it illegally marketed Seroquel for unapproved uses.
The firm's US division agreed to the fine for marketing Seroquel for so-called "off-label" uses not included in the drug's approved product label.
US authorities contended that AstraZeneca illegally marketed Seroquel for uses never approved by the Food and Drug Administration such as aggression, Alzheimer's disease, anger management, anxiety, attention deficit hyperactivity disorder, bipolar maintenance, dementia, depression, mood disorder, post-traumatic stress disorder, and sleeplessness.
By doing so, the pharmaceutical group received government insurance payments that US officials said were fraudulent.
© 2010 AFP