AstraZeneca flags cancer advances, silent on Pfizer bid talk
By Ben Hirschler
LONDON (Reuters) - AstraZeneca highlighted progress with new cancer drugs that may revive its fortunes as it posted a 17 percent fall in core earnings per share on Thursday, reflecting patent losses on profitable older medicines.
Britain's second-biggest drugmaker made no reference to a reported 60 billion pound bid approach from Pfizer in its results statement. The firm's new cancer drugs are seen as a big draw for the U.S. group.
Analysts at Berenberg Bank said bid speculation and progress with the late-stage drug pipeline should support the shares, despite "another difficult set of financials".
The stock, which has rallied strongly this week on Pfizer's reported interest amidst a slew of other pharma deal-making, gained 2.3 percent to 41.34 pounds by 0750 GMT (8.50 a.m. British Time), after hitting a new all-time high of 41.70 pounds.
AstraZeneca said it would advance four important experimental medicines into late-stage clinical testing - two for cancer and two for breathing disorders, including the first of its closely watched immunotherapy cancer drugs, MEDI4736.
The decision to push ahead with the Phase III testing of the drug, which belongs to a class known as anti-PD-L1 treatments that boost the immune system, follows evaluation of positive Phase I data that will be presented at the May 30-June 3 American Society of Clinical Oncology conference in Chicago.
The first lung cancer patient is expected to be given the drug as part of the pivotal trial imminently.
"We are investing in our rapidly progressing pipeline and the key platforms that are the backbone of our strategy to return to growth," Chief Executive Pascal Soriot said in the statement.
"To further concentrate organisational focus, we will continue to redeploy our resources in our core priorities and pursue opportunities that maximise the value of our pipeline and portfolio."
The research team is also moving into Phase III another lung cancer treatment called AZD9291, as well benralizumab for chronic lung disease and tralokinumab for severe asthma.
AstraZeneca reiterated that 2014 sales were likely to fall by a low-to-mid single digit percentage figure, with earnings declining "in the teens" as generic competition is expected to kick in for Nexium, its popular heartburn and ulcer drug.
Sales in the first quarter were flat at $6.42 billion (3.82 billion pounds), generating "core" earnings, which exclude certain items, of $1.17 a share. Core operating profit fell 16 percent to $1.95 billion.
Industry analysts, on average, had forecast sales in the quarter of $6.37 billion and earnings of $1.20 a share, according to Thomson Reuters.
The slightly better-than-expected sales performance reflected higher revenues than analysts had anticipated for Nexium and cholesterol fighter Crestor, both of which face looming loss of patent exclusivity.
Sales of diabetes drugs, however, were "notably disappointing", said analysts at Deutsche Bank.
(Editing by Erica Billingham)
