AstraZeneca swings into loss on slumping drug sales
AstraZeneca fell into a loss in the last quarter of 2013 on a huge impairment charge caused by weak sales of its diabetes drug Bydureon, the Anglo-Swedish firm said Thursday.
Overall, it posted a 59-percent drop in annual net profits, with the group hit also by patents expiring on key brands, the company said in a results statement.
AstraZeneca reported a net loss of $524 million (387 million euros) in the fourth quarter, compared with a profit of $1.507 billion in the final three months of 2012. Sales dipped six percent to $6.84 billion.
The London-listed company took a vast $1.758-billion impairment on the disappointing performance of Bydureon.
Annual profit after tax tumbled to $2.556 billion last year compared with $6.240 billion in 2012.
Revenue slid six percent to $25.71 billion last year, as the firm also faced intense competition from generic drugmakers.
"As expected, our financial performance for 2013 reflects the ongoing impact from the loss of exclusivity for several key brands," said chief executive Pascal Soriot.
"In the near term these headwinds will remain challenging," he added.
In the fourth quarter, AstraZeneca had announced plans to buy Bristol-Myers Squibb's stake in their diabetes venture for up to $4.1 billion, which includes the Bydureon brand.
Soriot has said that diabetes is expected to affect more than 550 million people by 2030.
The company is also hoping cancer drugs can help to turn around its fortunes after AstraZeneca last August agreed to buy US-based firm Amplimmune which specialises in such treatments.
AstraZeneca recently lost market exclusivity for schizophrenia treatment Seroquel IR and heart-failure medication Atacand in many markets, and for anti-cholesterol drug Crestor in Canada.
This year, the company's second- and third-biggest sellers -- heartburn medicine Nexium and asthma drug Symbicort --are set to lose protection on some of their patents. Crestor loses US patent protection in 2016.
The group is meanwhile cutting 5,050 jobs under a three-year cost-cutting plan set to end in 2016.
"The overall programme remains on track to deliver the approximately $800 million anticipated annual benefits by the end of 2016," AstraZeneca said on Thursday.
But costs linked to the restructuring would be about $200 million higher than previously forecast, at $2.5 billion.
Looking ahead, Soriot added the company expected to experience a low-to-mid-single-digit percentage decline in revenue this year, and a percentage decline in core earnings per share "in the teens".
The poor earnings outlook sent AstraZeneca shares plunging 1.61 percent to 3,814.5 pence in late afternoon deals on London's rising FTSE 100 index.
"AstraZeneca stock headed lower ... after 2014 forecasts painted a pretty miserable outlook for the drug maker," said Toby Morris, senior sales trader at CMC Markets.
"Investors are set to see earnings declines 'in the teens', hampered by the increasing headwinds of generic competition."
© 2014 AFP