AstraZeneca Raises 2024 Sales and Profit Forecasts

AstraZeneca (LON:AZN) raised its 2024 sales and profit forecasts following stronger-than-expected third-quarter results, driven by solid demand across its product portfolio and anticipated sales milestones for its cancer drugs.

Q3 Performance

The company’s Q3 performance benefited from product sales that exceeded expectations by 4%, and EPS rose by 2% above estimates, fueled by broad-based strength despite higher research and development costs as previously anticipated.

Analysts at Barclays (LON:BARC) noted, “We dig into the results below, but in our view the company did what it needed to do on a Product Sales perspective and also raised FY24 guidance on top and bottom line.”

Key Drivers

Key drivers for AstraZeneca’s results included significant contributions from important products, with Symbicort and Tagrisso exceeding forecasts. Symbicort's sales outperformed expectations by 20%, while Tagrisso surpassed by 3%. However, these gains were slightly offset by shortfalls in Imfinzi, Imjudo, and Enhertu sales, which reported a 2% decline compared to projections. Soliris also missed targets by 10%, but this was largely compensated by Ultomiris, reflecting successful product transitions within the portfolio.

2024 Guidance

Based on its performance, AstraZeneca revised its full-year 2024 guidance, raising sales and EPS growth expectations to the high teens, up from previous estimates in the mid-teens. Analysts at BofA Securities remarked that this guidance is likely in line or slightly ahead of consensus expectations, approximately 15% for sales.

AstraZeneca indicated confidence in sustained growth leading into 2025. The CEO highlighted this optimistic outlook in a press release, suggesting that momentum will carry into the next fiscal year, a key discussion point in the upcoming investor call.

Ongoing Research and Regulatory Updates

In addition to its core product performance, AstraZeneca shared updates on ongoing research and regulatory efforts. The company announced the withdrawal of its initial filing for the Dato TL-01 indication and submitted a new biologics license application (BLA) for TL-01 and TL-05, targeting EGFR-mutated non-small cell lung cancer (NSCLC).

BofA Securities analysts estimate the second-line EGFR market represents a $500 million to $1 billion opportunity, as consensus expectations have adjusted downward recently.

AstraZeneca outlined expectations for pipeline progress and discussed potential headwinds, including volume-based pricing for Farxiga in China and increased generic competition in Europe for Soliris and Brilinta.

Despite these challenges, BofA Securities analysts remain optimistic, anticipating continued revenue growth, albeit with some pressure on operating margins, as the company aims for a mid-term target of approximately 35%.

AstraZeneca also highlighted a robust pipeline of Phase III trials over the next 18 months, which analysts believe could unlock significant growth opportunities, including the AVANZAR trial for Dato in first-line NSCLC (a projected $10 billion market), Enhertu data in HER2-positive breast cancer, and Camizestrant in ESR1-mutated breast cancer.