3rd UPDATE: AstraZeneca Posts Lower 4Q Pfts, Unveils Job Cuts
29 Gennaio 2009 - 5:08PM
Dow Jones News
U.K.-based drugmaker AstraZeneca PLC (AZN) Thursday forecast
flat 2009 sales and unveiled plans to cut a further 7,400 jobs
worldwide by 2013, while posting a 1.4% decline in fourth-quarter
net profit.
Combined with its other cost-cutting moves announced in 2008,
the overall efficiency program should deliver savings of $2.5
billion a year at a cost of $2.9 billion, with a total of 15,000
jobs cut over five years, AstraZeneca said.
Staff reductions are expected across AstraZeneca's operations,
including research and development.
AstraZeneca, the U.K.'s second largest drugmaker by sales after
GlaxoSmithKline PLC (GSK), currently has more than 67,000 employees
and operations in more than 100 countries, according to its
website.
"This is all about improving efficiency to enable us to invest
and maintain long-term competitiveness," Chief Executive David
Brennan told reporters during a conference call, noting that the
economic downturn isn't the driver behind the deeper cost cuts.
Brennan also said AstraZeneca doesn't need a merger or large
acquisition going forward, but added that he does see opportunities
for partnerships and collaborations that would strengthen the
company's pipeline.
"We don't have large acquisitions in our strategy," he said.
Pfizer Inc.'s (PFE) takeover of smaller rival Wyeth (WYE) this
week has reignited speculation that other major drugmakers may
follow its example and consider a large deal to overcome the
considerable revenue decline expected to affect most of the big
pharmaceutical companies as today's blockbuster drugs go off patent
in the next five years.
Turning to 2009, AstraZeneca forecast flat revenues in constant
currency terms, but also flagged higher full-year core earnings per
share, expected within a $5.15 to $5.45 range. Core earnings
exclude restructuring costs and charges related to the 2007
purchase of U.S. biotech company MedImmune.
No share buybacks are planned in 2009 because the drugmaker
wants to improve flexibility to reinvest in the business, it
added.
AstraZeneca's share price fell heavily after release of the
results, reflecting investor disappointment at the company's
fourth-quarter performance and outlook for 2009.
At 1344 GMT shares, which have gained around 35% in the last 12
months as investors increasingly sought defensive stocks, were
trading 152 pence lower, or down 5.3% at 2,707 pence in a lower
London market.
Brokerage Charles Stanley cut its rating on the stock to reduce
from hold, saying that the earnings per share guidance for 2009 was
disappointing.
Net profit declined 1.4% to $1.25 billion in the three months to
Dec. 31, 2008, from $1.27 billion a year earlier, reflecting higher
restructuring costs and impairment charges. This net profit results
was below the average estimate of $1.49 billion from 12 analysts
polled by Dow Jones Newswires.
Fourth-quarter sales rose marginally to $8.19 billion from $8.17
billion, due to the strengthening dollar. In constant exchange rate
terms, sales rose 4%.
Sales of cholesterol-lowering drug Crestor, AstraZeneca's
third-largest product, rose 23% in the fourth quarter to $987
million, thanks to increased prescriptions as a treatment for
clogged arteries. Asthma treatment Symbicort also saw its sales
grow strongly, up 18% to $514 million in the quarter.
Turning to its pipeline, AstraZeneca announced plans to apply
for regulatory approval of four experimental drugs in 2009. These
are: lung cancer drug Zactima; painkiller PN400 which is developed
with Pozen Inc. (POZN); blood thinner Brilinta, previously known as
AZD6140, and a combination pill containing cholesterol drugs
Crestor and Abbott Laboratories' (ABT) TriLipix.
AstraZeneca's key experimental drug, diabetes treatment Onglyza,
is under regulatory review in the U.S. and the European Union.
Charles Stanley analyst Jeremy Batstone-Carr said that while
AstraZeneca's pipeline is progressing, he sees few key events
occuring in 2009.
"We do not see sufficient [catalysts] in the pipeline to make
good the around 20% lost revenue, as key products move off-patent
over the next five years," he said.
Although AstraZeneca last year managed to protect its two
largest drugs from the threat of generic competition, analyst are
concerned that its current late-stage pipeline may not be enough to
offset the patent expiration of several key products from 2011.
Company Web site: www.astrazeneca.com
-By Elena Berton, Dow Jones Newswires; 44 20 7842 9267;
elena.berton@dowjones.com
(Andrea Tryphonides contributed to this report.)
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