AstraZeneca chief Pascal Soriot heralds the start of a 'period of sustained growth for years to come'
AstraZeneca CEO Pascal Soriot declared victory today in the long-running fight to turn around the struggling pharma giant, gaining a significant spurt in Q3 sales for the company and pointing to a period of “sustained growth” driven by new product development, a strong commercial organization and success in the growing China drug market.
Yes, revenue slid 14%, largely as a result of a lull in the kind of aggressive “externalization” from its drug portfolio that has buoyed the company for years. But with its big 3 cancer drugs — Lynparza, Tagrisso and now Imfinzi — leading the way, the company has a workable strategy to keep expanding sales. That starts with a 9% increase in Q3 while year-to-date there’s been a 2% growth in this column.
By any standard, that is a major achievement for the company and the executive crew in charge. And they $AZN would agree with that.
“Today marks an important day for the future of AstraZeneca,” Soriot noted at the top of today’s release, “with the performance in the quarter and year to date showing what we expect will be the start of a period of sustained growth for years to come. Commercial execution has been exceptional and our new medicines are now firmly established as the drivers of growth, supporting our continued success in emerging markets.”
Of all the Big Pharma companies, AstraZeneca has suffered some of the worst losses due to generic competition for their old franchise drugs. That left Soriot batting away a takeover attempt by Pfizer as he worked to build a new foundation of drugs that can deliver steadily rising, blockbuster returns.
Key to the process was gaining an early, breakthrough approval for their PARP Lynparza, while going on to build new revenue by adding supplemental approvals. Three more PARPs have now crowded in behind AstraZeneca, but the UK company clearly has a commanding lead there. Through its multibillion-dollar partnership at Merck, AstraZeneca is now in position to book hundreds of millions in added payments in Q4’s externalization column — another near term coup.
Tagrisso and Imfinzi, its PD-L1 drug, are both being positioned for new growth based on clinical trial successes. We still haven’t heard about the second big hurdle for Imfinzi’s MYSTIC study, which failed the first goal. But AstraZeneca’s outline on its growth plans includes a Q4 regulatory filing — though that outcome has been discounted now that the PACIFIC study has come through to open up a significant new cancer market for the company.
Several of Soriot’s strategies around new product development and selling off assets — including but not limited to marginal or disappointing products — is focused around the principle that the company needed to simplify its approach, concentrating on blockbuster, standard-of-care assets that could make a major difference. AstraZeneca underscored that with a 6% drop in R&D expenses in Q3, even as the company continues to pursue some big outcomes. And its roster of drugs to watch includes their asthma drug tezepelumab, which has shown some real promise in treating severe asthma.
At the same time, the pharma giant continues to winnow out the weakest drugs from the pipeline.
Two months ago researchers bullishly outlined the effectiveness of an AstraZeneca drug called vistusertib combined with chemo in treating drug-resistant cases of ovarian and lung cancer. But in their pipeline update today the company noted it is removing the mTOR inhibitor from Phase II while also axing an early-stage combo study with Calquence.
AstraZeneca has had plenty of setbacks along the way, and will certainly have more to come. But while skeptics will continue to challenge the company on revenue and overall performance, you can’t ignore the important achievement Soriot is pointing to today.
Image: Pascal Soriot. AP IMAGES