AstraZeneca raises forecasts amid investigations in China

AstraZeneca raised full-year forecasts and reiterated ambitious 2030 targets, but its third-quarter trading update failed to lift the share price.
Total revenue rose 21 per cent to about $13.7 billion in the three months to the end of September year-on-year at constant exchange rates, with demand up across its cancer, biopharmaceuticals and rare diseases drugs portfolio.
Sales rose 23 per cent to $6 billion in the United States, its largest market, and 31 per cent in emerging markets to almost $1.8 billion, excluding China, where sales rose 15 per cent to $1.7 billion.
The strong trading performance prompted the Anglo-Swedish company to raise full-year revenue and core earnings per share forecasts to “high teens percentage growth”.
Sir Pascal Soriot, who has overseen the turnaround of the portfolio of Britain’s biggest pharma company since he took charge in 2012, said AstraZeneca would issue formal guidance for next year at full-year results in February, but “we’re very confident that the headwinds we anticipate next year will be substantially offset by global demand for our portfolio of medicines”.
He added: “By the end of 2025, everybody will have a good sense as to where we are in terms of the trajectory to 2030, because we will have had quite a number of [drug trial] readouts that are very material, very substantial.”
At a capital markets day in Cambridge in May, the company set out a target to almost double total revenue to $80 billion by 2030.
Soriot, 65, suggested short-term trading could be impacted by investigations by authorities in China, but remained upbeat on its prospects there.
“It would be reasonable to expect we will be affected, but we will work through this and certainly continue building our presence there.”
Despite the full-year upgrade and positive outlook, shares in AstraZeneca traded down 0.6 per cent, or 58p, at £99.27.
The shares have sold-off in recent weeks over fears about the extent of the China investigations and are down a quarter since September’s peak.
Analysts at Shore Capital said AstraZeneca’s shares trade on a forward price earnings ratio of about 14 times “broadly in line to the US and European peer group but well below the about 18 times forward-looking multiple it has historically commanded.”
The City brokerage added: “Despite some growing uncertainty around China, we still believe a premium is warranted based on its earnings growth and pipeline prospects.”